A new funding opportunity for Penn-connected startups launched this week, adding millions in new cash to Philly’s VC ecosystem. 

The University of Pennsylvania announced a new $10 million startup investment fund called the StartUP Fund. Funded by the university and managed by the Office of the Chief Innovation Officer, the fund will support early-stage companies that spin out of university research. 

This fund is part of the university’s efforts to create more resources and opportunities for faculty who want to turn their research into businesses, John Swartley, chief innovation officer at Penn, told Technical.ly. 

“The money that fuels the translation and the creation of startups is hard to find,” he said. “[The fund] is now a continuum of different funding sources that either have already been established or [are] in the process of being established, that will hopefully support these really interesting newly emerging initiatives.” 

To qualify for the fund, a company’s product must be based on university research or ideas and have at least one Penn-affiliated researcher or faculty member as a founder. Applications are open for all 12 schools within the university. 

A team of external venture capital experts will review applications and give investment recommendations, said Thomas Logan, senior executive director at Penn’s Office of Innovation.  The group will evaluate each company’s commercial potential, product feasibility and the impact the investment would have on its growth.

The fund will make investments up to $250,000 and applications are currently being accepted on a rolling basis with investment decisions made quarterly. 

“The idea is that this seed funding helps these companies achieve significant milestones that, if achieved, will then be a catalyst for them to go on and raise a formal financing, [like a] Series A, etc,” Logan said. 

Universities step up in a tough VC landscape

The StartUP Fund comes after Philly’s rollercoaster year for venture capital. The region hit a five-year low for VC in Q2, but bounced back up in Q3. The region also broke into the top 10 VC markets in the world this year, according to PitchBook. At the same time, Philly-based founders are struggling to raise money from local institutions. 

For the last several years, local colleges have stepped up to support new startups.

Neighboring institution Drexel University launched a similar fund, its Innovation Fund, in 2023 to support researcher, student and alumni startups. Temple University funds its startups through Temple Ventures, a joint fund with Ben Franklin Technology Partners that provides both money and resources. 

The StartUP Fund adds to Penn’s existing startup ecosystem, with many student-founded companies or companies based on university research finding support through resource hubs, the Penn Center for Innovation and Pennovation Works. Major companies like Ghost Robotics and Spark Therapeutics came out of the university’s network. 

Penn also offers other funding opportunities for budding ventures, like the Penn Medicine Co-Investment Program and Penn Health-Tech, both of which focus on the healthcare sector. 

Ultimately, the goal of the fund is to help create a cycle of successful companies coming out of Penn that hopefully want to stay in Philadelphia, Swartley said. 

“If we can nurture and establish companies that set down roots here and grow here into major successful businesses,” Swartley said. “That’s great, not only for Penn and our technology and our faculty, but it’s great for the local economy.” 

Updated at 5 p.m. to add comment from John Swartley, chief innovation officer at Penn.