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University System of Maryland Announces New $25 Million Venture Capital Fund

June 30, 2016

The University System of Maryland (USM) recently announced a $25 million fund to invest in USM-affiliated companies or startups created by students, faculty and recent graduates.  Companies already based in USM research parks or university incubators are also eligible for funding. The system, comprised of 12 of the state’s public institutions, would invest $10 million in an early stage investment fund, known as the USM Early Stage Investment Fund (ESIF), over four years, with the remaining $15 million to come from outside investors, the state of Maryland, friends of USM and other venture capital groups. 

The USM Board of Regents approved the ESIF on June 10 and has already identified 17 startups at the University of Maryland-Baltimore, University of Maryland-Baltimore County, the University of Maryland Center for Environmental Science, and the University of Maryland-College Park as potential recipients for the first investment round.  USM will make individual investments of between $50,000 and $500,000 in startups in exchange for an equity stake in the companies. Eventually, USM will sell the equity stake back, putting the proceeds back into the ESIF or spending it on campus improvements across the state. Through this model, USM believes the fund will become self-sustaining. In addition to the monetary investment, ESIF companies will also be given access to resources on USM campuses, including incubator and laboratory space.

higher ed, venture capital