Stanford University’s StartX accelerator program
Stanford University is promoting entrepreneurship outside of the classroom after developing StartX, an accelerator program designed to invest money in startups that have an affiliation with the California university. Stanford is awarding $3.6 million to the program and plans to continually invest in companies whose founders are current students or alumni.
The university-backed accelerator functions similar to a venture capital firm in that it provides the needed capital for startups to fund projects and expand. However, Stanford does not take any equity in exchange for investing, allowing founders to either maintain complete control of their company, or at least a larger percentage if they are working with other venture capitalists as well who do require a portion of equity. The program began in 2009 and is quickly growing year over year.
The company requires interested companies to raise a minimum of $500,000 in order to be considered, with at least 30 percent of that amount coming from venture capitalists or angel investors. By meeting those guidelines,startups are then eligible to receive funding, and since there is no cap on how much money or how many companies Stanford can invest in, these companies have a relatively good chance of getting noticed.
Will this become a trend?
Over the past few years we’ve seen a number of accelerator programs pop up supporting businesses in a specific market, niche or location, therefore it makes sense for this industry to specialize to the point of collegiate affiliations. This reflects positively on the universities by showcasing the innovation that their students are able to harness, and StartX companies receive support from an accelerator linked to an educational institution that they were at once point a part of.
If more colleges start to follow suit, this will provide even more opportunities for students to take concept to reality and start businesses that the surrounding staff, investors and community will support. The continued growth of this program indicates that Stanford is dedicated to promoting entrepreneurialism both with current and past students and this may become a deciding factor for incoming students across the country who are looking for a good mix of in-classroom tutelage and the opportunity for real-world application.
In order to be sustainable, colleges considering implementing an accelerator program will need to find other businesses and institutions to partner with in order to sustain a healthy flow of funding.