Triangle universities look to alumni to invest in startups

UNC-Chapel Hill, N.C. State and N.C. Central are following in the footsteps of Duke University in creating a network of affluent university alumni interested in providing seed capital for startups founded on technology hatched at their respective institutions.

At the same time the four networks of alumni investors have formed a partnership, the Triangle Venture Alliance, that will cooperate with each other and even co-invest in some cases.

Eric Toone, vice provost and director of the Duke Innovation & Entrepreneurship Initiative, is optimistic that by joining forces the groups of alumni angel investors will be able to “move the needle” and boost the flow of capital to Triangle startups. The initial round of funding, or seed capital, is typically the most difficult for entrepreneurs.

The Duke Angel Network, which was established in June, already has lined up more than 65 alumni angel investors who between them have invested more than $1 million in seven companies, Toone said.

The Duke group doesn’t restrict itself to investing in Triangle companies, but four of those seven companies have ties to the Triangle and two of them – Baebies and SOLOpro – have local headquarters. A third, Testive, has offices in Boston and Durham.

In addition, more than half of the 80 potential deals that the network has looked into “have come from the Triangle,” Toone said.

Aided by a $250,000 grant from the U.S. Economic Development Administration, the four angel alumni groups will share back-office support and teams of students that will conduct “due diligence” on potential deals.

“The Triangle Venture Alliance will enable the Triangle universities to provide high-quality investment opportunities to our alumni and seed-stage capital to our startup companies,” Al Rebar, vice chancellor for research, innovation and economic development at N.C. State, said in a statement.

Toone is hopeful that the other universities will have their alumni investment groups up and running this summer.

David Ranii: 919-829-4877, @dranii