A venture capital firm is following the US model and locating itself on university campuses to invest in the tech stars of the future.
Campus Capital is the first firm in the UK to build ‘on campus’ investment funds in partnership with leading universities.
The University of Sheffield has signed up as the first partner to benefit from a £2m fund, and other northern universities are in talks to roll out the model nationally.
Skyscanner, which bought last month for £1.4bn by China’s biggest online travel firm, Ctrip, is an example of a UK firm founded on campus.
After being launched by a group of Manchester students in 2003, the website grew into one of the largest travel search platforms in the world – with roughly 60 million monthly users in more than 30 languages.
Campus Capital, which is based on successful US models, will invest in early-stage tech companies – whether they are university spin-outs, alumni businesses or local start-ups – and aims to provide attractive, tax-efficient returns for investors.
Skyscanner was bought by a Chinese firm earlier this yearStudents will be given the opportunity to act as venture capitalists by participating alongside investment professionals in the management of the portfolio. The firm has been launched by serial entrepreneurs Michael Howe, founder of Sheffield-based artificial intelligence firm Otus Labs, and Samantha Deakin Hill, who previously ran a digital agency and now supports tech start-ups at the University of Sheffield.
It has the backing of Tech North, whose former head Claire Braithwaite is among the advisory board members, along with Rupert Wingate-Saul of AXM Venture Capital.
Michael Howe said that on-campus venture funds had enjoyed considerable success in the US, and some US-based VC firms also employed student ambassadors.
“Many tech companies including Facebook and Snapchat were founded on campus and universities are at the forefront of research and development, so it makes sense to have funds based on campus,” he added.
“Many students are passionate about business and enterprise and in tune with new technology so are well placed to spot emerging trends and scout for potential investments.
“By giving them a deeper insight into the world of venture capital, we are nurturing the next generation of entrepreneurs and investors.”
The Campus Capital fund is to be managed by an FCA authorised manager working with Campus Capital and investors stand to benefit from SEIS and EIS tax relief.
The fund has already received initial commitments from a range of alumni and private investors.
Sara Pates, Head of Enterprise at the University of Sheffield, said: “We are very excited to be partnering in such an innovative initiative, which compliments existing similar provision for students to make stock market investments.
“It is the ‘real’ element of both of these opportunities which make them so valuable to our students.
“Students will develop a broad range of employability skills whilst gaining a unique insight into the world of VC investments and entrepreneurial startups.”
James Bedford, Head of Investment Strategy at Tech North, said: “Tech North are keen to improve access to investment in the North of England and strongly support Campus Capital as they not only seek to help solve the funding gap but also wish to create the next home-grown venture capital experts, further strengthening the North’s investment eco-system.”