Looking for Quality Deal Flow? Consider University Networks

By Megan Maltby

Here at First Angel Network, we use a variety of methods to find great deals. We make it a point to attend events targeted at entrepreneurs, and we receive many referrals from our co-investment partners here in Atlantic Canada. The region’s numerous accelerators and startup co-working spaces are also a key source of entrepreneurial talent.

However, there is one source of deal flow that is often overlooked by angels- the university ecosystem. It is no coincidence that startup hubs frequently bubble up around academic institutions (see: Silicon Valley, Boston). Universities can provide investors with unique access to innovative companies- oftentimes before the companies have even been fully spun out.

Here in Atlantic Canada, we are lucky to have an excellent collection of universities- many of which have been investing heavily in entrepreneurship and commercialization of research.

One standout institution is the University of New Brunswick, which was recently named the Most Entrepreneurial Post-Secondary Institution of the Year by Startup Canada. The school offers various programs and accelerator offerings through The Pond-Deshpande Centre and The Wallace McCain Institute, and has introduced a new Master’s Program in Technology Management & Entrepreneurship, set to kick off this Fall. Saint Mary’s University in Halifax has a similar offering called the Master of Technology Entrepreneurship & Innovation, where students have the option to launch a new venture as an alternative to the traditional thesis requirement.

Acadia University has been leading the way in big data with the introduction of the Acadia Institute for Data Analytics, and Newfoundland’s Memorial University has an impressive support system in the Genesis Centre- an award winning business incubator for technology start-ups.

Dalhousie’s Norman Newman Centre for Entrepreneurship has also introduced a number of unique offerings in recent years- including the Starting Lean program, the Launchpad Accelerator, and the hosting of Canada’s Business Model Competition. In fact, one of our recent portfolio companies, Spring Loaded Technology, was borne out of the first Starting Lean cohort.

In the Starting Lean course, three students from various faculties (Business, Engineering, and Neuroscience) developed the idea for an energy-restoring knee brace that would enhance strength and mobility for athletes and those suffering from mobility issues. Spring Loaded came into contact with First Angel Network in a mentoring capacity while in the Starting Lean course, maintained contact, and received investment from FAN a year later. The company is growing fast, and was even awarded with the 2015 Young Entrepreneur of the Year Award (a $100K prize) earlier this summer. Spring Loaded is just one example of a promising company that would not exist if it weren’t for university programming.

In addition to programs and courses specifically focused on entrepreneurship, Atlantic Canada is also home to one of the country’s top medical schools, as well as excellent engineering and computer science faculties- all of which produce superior human capital and novel R&D.

While it is clear that the university ecosystem can provide access to great deal flow, many angels do not know how to tap into this important resource. Luckily, we have compiled a list of tips to get started:

  • Connect with Alumni Associations: If you have an interest in giving back to your alma mater, get in touch with your alumni association. They likely have a local chapter, and most even have groups on social media that you can join to post requests and learn more about the startup scene on campus.
  • Contact Technology Transfer Departments & Organizations: Many universities have departments focused on the commercialization of technology developed on campus. For example, we have worked heavily with Dalhousie Industry Liaison and Innovation (ILI) over the years to share knowledge and gain access to seed-stage companies. Here in Atlantic Canada we are also blessed to have Springboard Atlantic- a regional commercialization and industry liaison network representing 18 universities and colleges. These organizations are there to help researchers get off the ground, and it is in their best interest to make connections with local investors.FAN has collaborated with Springboard in the past to deliver two exciting education programs: “From Mind to Market”- a seminar focused on commercialization- and “Commercializing MedTech” with a focus on commercialization of medical devices and other medical innovations. Which brings us to our final point…
  • Volunteer your time: A great way to ensure introductions to entrepreneurs is to participate in university programming in some way. This could be through board participation, by acting as a mentor partner with university accelerators/incubators, or contributing as a guest judge for a campus pitching competition. You can even offer up your time as a guest lecturer in an entrepreneurship or technology class.

Academic institutions are increasingly becoming a hotbed for startup activity. Smart angels who want access to deals at the ground level know where to look- by embedding themselves in the University Ecosystem.

Further Reading: Our friends over at the Angel Capital Association have touched on this topic in the past. If you are interested in learning more, check out this slide show presented earlier in 2015, "Partnering with Universities for Deal Flow."