Students enrolled in the St. Mary’s University Masters of Technology Entrepreneurship and Innovation program may have noticed some changes in how they access the university's Durland Innovation Fund.
In a recent overhaul of its funding distribution, the MTEI program will invest in its student-led businesses through a venture capital model, moving away from its pitching competition.
“The startups in the Investor Ready and Launch and Grow incubation phase receive funding options based on achieving milestones,” Ellen Farrell, a professor of venture capital and entrepreneurship at SMU said in an interview.
“Like the VC model, the funding accelerates and increases as the start-ups mature.”
Farrell said the students enrolled in the Applied Option part of the course will receive funding when they meet their business milestones. These students are responsible for developing a business following the lean startup method.
Throughout the course, there are six milestones, therefore six opportunities to gain new funding. There are 11 students doing the applied project this year, with three working outside the cohort.
“The option of not receiving investment until they do something spectacular is a pretty motivating factor,” said Farrell.
“In addition to achieving milestones and being rewarded by being awarded more money, it’s also more heavily weighted on the back end which means the earlier milestones receive less funding and they’ll earn more as they go along.”
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And through a partnership with Mitacs, a national non-profit training and research organization, MTEI students can leverage their investments through its entrepreneurship fund.
“Mitacs came to us and they said ‘wow, more than any other institution we’ve seen in the region, this MTEI program perfectly fits this particular funding opportunity.’ So with that, there is an opportunity for the students to leverage their Durland funding,” said Farrell.
On a community level, MTEI startups are also encouraged to partner with co-founders and organizations outside the program. For example, Ashored Innovations, which is building a ropeless fishing solution through the program, will move into Innovacorp’s Centre for Oceans Ventures and Entrepreneurship (COVE) this June.
Farrell said the highest performing teams will be provided with office space in the new SMU Entrepreneurship Centre.
The cohort, which is in its third week, will earn investments from SMU’s Durland Innovation Fund, which was created by SMU business alumni Michael and Catherine Durland in 2015.
In previous years, the Durland Innovation Fund awarded the top three MTEI teams with up to $20,000 in investments through a pitching competition.
The MTEI program changed this model so the fund could reach a broader number of its students.
"Mike and Catherine Durland actually made the suggestion of weighting the funding more heavily towards the latter milestones to simulate the VC model and to encourage the students to move quickly," said Farrell through an email.
Farrell said teams can receive up to $25,000 for their first milestone, with $77,000 available this year from the Durland fund.
“That’s doesn’t include the leveraging from MITACS,” said Farrell. “That opportunity could allow them to access as much as $30,000 or $40,000. The leveraging element of it is quite substantial.”
Disclosure: MTEI is a client of Entrevestor.
