A startup spun out of Massachusetts Institute of Technology (MIT) wants to put serious money into entrepreneurs tackling issues like education, health, economic prosperity and sustainability.
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The startup, MIT Solve, today announced plans during its annual flagship event to create a $30 million Solve Innovation Fund. It’s looking to raise money for the fund from philanthropic donors to put back into companies with an eye toward pressing social problems.
How It Works
MIT Solve selects social entrepreneurs, divided into Solve teams and helps them address large questions, like how urban residents can design places that promote physical and mental health, or how to promote community-driven inclusion.
They also work with leaders and tech companies to broaden outreach and get donations to feed into their teams.
Once the Solve Innovation Fund raises money from donors, it will make debt and equity investments in Solve teams. In return, these teams will get further advising. The fund’s organizers said eventual returns from fund investments will be reinvested in future Solver-born initiatives. Think of it as an in-house pay it forward.
About $3 million has already been established into the fund, from Noubar Afeyan who is the CEO of Flagship Pioneering and founding anchor of the fund.
It’s almost been a year to-date since General Motors offered $100,000 grants to four startups within Solve. Last month, Solve announced $1.25 million in funding for Solve startups, from sponsors like GM, Schmidt Futures and Vodafone Americas Foundation. The Solve Innovation Fund will be a more formal attempt at getting sustained capital for these teams.
Currently, about 60 percent of Solve teams are profit focused, and 40 percent of Solve teams are non-profit. Casey van der Stricht, Solve Innovation Fund principal, said she’s seen an increase in the smaller teams focused on profit, so this move addresses that.
“We want to help these organizations get ready for more traditional funding rounds,” she said, referring to the struggle that impact-focused startups face when searching for investment dollars.
It makes sense that Solve would begin to make a shift away from nonprofits, to more tech and incubator focused. Over the years, they’ve hosted Justin Trudeau, Eric Schmidt, Indra Nooyi and Yo-Yo Ma at their flagship events. It’s clear they already have the high-brow tech network on their side.
Illustration: Li-Anne Dias