Osage University Partners, a venture capital firm out of Philadelphia, has raised a $273 million fund to invest in startups that are commercializing university research.
This is the firm’s third fund dedicated solely to these university startups, bringing its total assets to $600 million. Like the two previous funds, the investment will be used to “invest in companies developing technology discovered in the labs of its partner institutions,” according to a company press release.
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According to John Lee, a principal on OUP’s tech investment team, their fund has slightly different requirements for investment, versus other venture capital firms.
Most startups start with a market problem, develop meaningful tech, and solve said problem. With research startups, “you’re kind of going backwards,” on that process, Lee said.
You’re first developing a technology, then you’re trying to solve a problem, Lee explained. They’re taking a chance on those kind of startups. And since 2009, they’ve taken a bunch of chances by investing in 140 startups, according to Crunchbase data.
OUP works with 98 universities, research institutions, and accelerators in the U.S. and abroad, including Harvard University, New York University, Michigan State University, Rutgers and Tel Aviv University (others found here). They invest in an even split of life sciences and tech companies. The fund shares its investment profit with the universities the startups are born out of.
While this fund will be used to continue to invest in companies, like all venture capital firms, OUP will continue to pour time into companies that aren’t quite up and running yet, Lee said.
OUP also advises professors, graduate students or academics eyeing the idea of starting their own company, he said. This means connecting them to co-founders or giving them knowledge on how to start a company.
There’s a value in investing in university spinouts, before they fully materialize: it will catalyze deal flow – and be the “tide that lifts all boats,” Lee said.
Illustration: Li-Anne Dias