Stanford University is going to start directly investing in students’ companies. Stanford is also giving a $3.6 million grant to StartX, a non-profit startup accelerator for Stanford-affiliated entrepreneurs.
StartX, which was founded in the summer of 2009 as a student initiative, has three classes of companies per year, and takes no equity from the companies. The accelerator is financially and legally independent from the University. It will receive a $1.2 million grant annually over the next three years from Stanford. StartX companies must have at least one founder with a Stanford affiliation.
StartX, Stanford University and SHC (Stanford Hospitals & Clinics) created the Stanford-StartX Fund to help boost the entrepreneurial endeavors of Stanford students, faculty, alumni and staff at a critical, early stage in their ventures. StartX startup teams can now receive financial backing from the university and the hospital to help bring their innovations to market, faster and more efficiently. Any StartX founder raising a round of financing may, at their option, access investment by the Stanford-StartX Fund if the round of financing meets a set of clear and objective criteria. The fund will not take a lead role in company financings, but instead will participate as a minority investor alongside other venture capital and angel investors. This marks the first time either the university or the hospital has developed a fund to invest directly in the entrepreneurs emerging from the Stanford community.