The Michigan State University Foundation (MSUF) announced today the formation of its new, $5M venture investing subsidiary, Red Cedar Ventures. Its newest program features both a pre-seed fund and an opportunity fund focused on helping Michigan State University-based startups and technologies overcome critical funding gaps, accelerate growth, and provide follow-on, growth-stage capital.
“We have been working hard to put together a campus-wide ecosystem for entrepreneurs that embraces all of the creative talents across the university,” MSU President Lou Anna K. Simon said. “The creation of these programs addresses a critical capital gap for our own startup companies. Through Red Cedar Ventures, we can make sure the groundbreaking ideas created by Spartans reach those who need them most.”
In the last four years, MSUF has deployed over $2M in pre-seed funding to more than twenty companies. Red Cedar Ventures will continue this kind of pre-seed investment. Additionally, the Red Cedar Opportunity Fund allocates $5M to participate in select, follow-on investment rounds that are led by professional venture firms.
“Many of our Michigan State University startups are working on breakthrough ideas and solutions that could greatly benefit the public,” said Randolph Cowen, chair of the MSUF Board of Directors, “however, because early-stage private investment capital is not broadly available in East Lansing, these ideas struggle to get translated into commercial success.” Cowen went on to say that Red Cedar Ventures will help unlock the potential of these young companies, getting their products into the hands of businesses and consumers.
Both Red Cedar Ventures Pre-Seed and Opportunity Funds will be overseen by a Board of Directors composed of members from MSUF’s own Board of Directors. MSUF’s executive management team will oversee the day-to-day fund operations. An advisory board will be established and will draw on the expertise of leading venture capitalists from across the nation, as well as student venture analysts from Michigan State University’s Broad College of Business.
“The Greater Lansing area is fast becoming an attractive place for inventors and entrepreneurs to start and grow their businesses,” said David Washburn, executive director of the Michigan State University Foundation. “Red Cedar Ventures signals the Foundation’s ongoing commitment to the health and growth of our area’s entrepreneurial ecosystem.”