Velocity, the University of Waterloo’s highly regarded startup entrepreneurship program, is launching a new venture fund to connect early-stage companies with much needed capital.
The new fund, powered by the AngelList investment platform, will make it easier for investors to back the diverse portfolio of startups supported by the 10-year-old Velocity program, the university said Wednesday in a news release. AngelList, founded in 2010 in San Francisco, is a website that connects investors with promising startups.
The full text of the news release is here:
The University of Waterloo’s flagship entrepreneurship program, Velocity, is launching a venture fund that aims to connect early-stage startups to the capital they need.
The new AngelList-powered venture fund, which will invest in startups in sectors ranging from software to biomedical, will launch this Spring. It will give investors a simple way to invest in a diversified portfolio of early-stage startups supported by Waterloo’s Velocity Garage. Since launching 10 years ago, Velocity has helped launch 300 companies who have collectively raised over $850 million in funding.
The new venture fund will replace a grant system used to fund awards in the incubator’s tri-annual Velocity Fund Finals (VFF) pitch competition at the University of Waterloo, which awards four $25,000 grants to new and emerging startups. The awardees have collectively shown the ability to generate a return that outpaces an average venture capital fund.
“Traditionally, the investment community has viewed early-stage startups as difficult to assess, high-risk and unproven, which has made it difficult for many innovators to access funds needed to take the first steps of building product and showing customer appetite,” said Jay Shah, director of Waterloo’s Velocity program. “With a solid track record of VF-winning companies valued at well over $1 billion, we believe this new venture fund can further grow Waterloo’s innovation sector and help the University continue to contribute to Canada’s economic development.”
The AngelList-powered venture fund will launch in March, making its first investments in the winners of the next Velocity Fund $25K.
Waterloo’s VFF competition started in 2011 when Kik CEO and Velocity alumni Ted Livingston donated $1 million to support emerging startups with early-stage funding and received an additional $1 million from investor Mike Stork.
“Eight years ago, I made a million-dollar bet on the potential of Waterloo. One billion dollars of value creation later, that bet has proven a winner,” said Ted Livingston, Founder and CEO of Kik. “It has always been my vision for the program to become a self sufficient fund, so I am excited for us to be taking this next step. This is just the beginning for Waterloo.”
Since 2011, Waterloo has hosted 23 VFFs, with each competition awarding $100,000. Of the 91 companies that won VFF funding, 74 per cent are still active and have a combined value of over $1 billion. Former winners include North (formerly Thalmic Labs), Embark Trucks, MappedIn, Reebee, ExVivo Labs, Kira Talent, EMAGIN, Fiix and Avro Life Science.
An investment equal to the awards granted to the 30 VFF winners between 2011 and 2013 would have yielded an estimated annual return of 57 per cent. Estimated returns for the 35 winners between 2014 and 2016 would are estimated at 14 per cent and growing.
Over the past 10 years, Velocity has helped to launch over 300 companies who generated over 2,300 jobs.
