The hardest part of starting a company is rarely coming up with the idea, according to the University of Cincinnati. It’s finding someone willing to fund it.
Since 2022, the UT Seed Fund has funded University-born startups, such as its most recent investment this past May, to bridge research with commercialization. The multimillion-dollar investment fund runs under the University’s umbrella program Discovery to Impact, which focuses on turning University research into companies. The fund created a way for the University to invest in its own intellectual property, resulting in 11 investments so far.
“(The program is) where a faculty member or graduate student with a real piece of technology gets connected to the training, the mentors and the investor relationships they need,” said Mark Arnold, the associate vice president for Discovery to Impact and managing director of the Seed Fund.
Former UT President Jay Hartzell and Jim Davis, current UT president and former vice president of business operations, created the $10 million investment fund to supply up to four startups a year with a one-time investment up to $250,000, which they can spend on any expenses.
“They had this vision to accelerate commercialization at the University, and they were backers and supporters, and built the structure and put the funding in place to make the Seed Fund a reality,” Arnold said.
Every startup the Seed Fund invests in goes through a screening process to determine the eligibility of the company and the amount of money they receive. It starts with identifying the exact University connection, whether that be from licensed intellectual property, sponsored research or founders who have come through University programs. The Seed Fund team then examines the performance of a company by referencing their serious outside investors and the company’s technology.
“We ask probing questions,” Arnold said. “Is the technology real and differentiated? Is the team credible for what they’re building? Is the financing and the legal structure clean enough so that the University can get comfortable investing in this entity?”
The fund has shown a primary focus on startups founded between 2018 and 2024 that revolve around natural sciences, engineering and medicine companies, although Arnold acknowledged the Seed Fund is open to all schools and colleges at UT.
This is reflected in companies such as Celadyne Technologies, Jurata Thin Film and TAU Systems. Celadyne Technologies focuses on enhancing hydrogen fuel cells for alternative energy. Jurata Thin Film creates ways to transport vaccines without refrigeration and administer them without needles. TAU Systems produces laser-powered particle accelerators.
Certain startups that have been invested in by the fund, such as ClearCam Inc., said there are advantages to being developed closer to or under UT resources, such as heavy collaboration from UT graduates and faculty, compared to other investment funds located throughout the country.
“We have a much closer relationship,” said John Uecker, the CEO and co-founder of ClearCam. “There’s a lot more touchpoints with us than most.”
Christopher Idelson, John Uecker, Doug Stoakley and Christopher Rylander started ClearCam Inc. back in 2018 as a collaboration between the Cockrell School of Engineering and Dell Medical School. The startup began with an idea for a mechanical engineering class and developed into an award-winning medical device company.
“It was kind of a nice story that was known among the innovation world on campus,” Uecker said.
In February 2020, the Food and Drug Administration approved ClearCam’s “ClearScope,” a medical device that functions as a lens cleaner eliminating the need for clinicians to keep removing and cleaning a scope during surgery. The approval allowed ClearCam to sell its product to places such as Emory University in Atlanta, Veterans Affairs in Orlando, Baylor Scott & White hospitals and more. The Seed Fund took notice and invested, marking the fund’s second investment.
“Especially in the med-tech space, it takes quite a bit of capital before you’re generating any meaningful revenue,” Uecker said. “So (we) like the attention and exposure and UT has provided a lot of that.
However, the post-investment relationship between the Seed Fund and these companies has, according to Uecker, a “big gap” in the aid provided and the effort to continue the company’s successful commercialization.
“It’s a great start and I think UT has more and more innovation programs and different mechanisms to support that,” Uecker said. “We just need to throw a little gasoline on the fire to build it bigger and faster.”
The fund has expanded into other startups outside of Austin, such as NALA Membranes, a company started by two Virginia Tech professors addressing challenges in reverse osmosis membranes to provide advanced water purification. NALA Membranes was formed around research from a Virginia Tech professor and a UT professor on chlorine-durable reverse osmosis.
“That collaboration was from some polymer chemists,” said Sue Mecham, cofounder and CEO of NALA Membranes. “It was kind of a good marriage of ‘here’s people that design materials,’ and ‘here’s people that know what kinds of properties we need.’”
NALA Membranes is based in North Carolina, but UT owns its patent and licenses it to the company. In return, NALA Membranes pays the fee for the license and legal costs of securing this patent. Even though UT owns the patent, Dr. Mecham said they did not provide the university a board position for NALA, allowing full autonomy for the company.
“The investors will have a position on the board, but UT Austin does not have a board position, so they would be relying on the other board investors to shepherd their fund.” Mecham said.
Other startups invested in by the Seed Fund showed rapid growth even before the fund’s contribution. In 2024, the United States Army renewed its contract with Celadyne Technologies for an additional $1.9 million, highlighting the success of the company before the involvement of the Seed Fund.
“If you look at our results in the past three years, companies that have come through our pipeline have raised more than $100 million in venture capital,” Arnold said. “That number belongs to the researchers and the graduate students who were willing to take that leap and believe in the programs.”
The Seed Fund has established a long line of companies to bookmark the research created within the University, adding to it every year and giving University-born startups an initial fund to bridge them to larger markets.
“The best research at UT Austin doesn’t have to stay in a lab or be locked in a journal,” Arnold said. “Some of it can become a company, a product (or) a job for a classmate. So, if you build something and you believe in it, I think that is critical.”
