Funding

WARF maintains an investment fund it may use to invest in its startup companies that meet certain criteria, including the requirement of a suitable co-investor. The WARF internal Startup Committee must recommend, and the WARF Board of Trustees must approve, all investments in WARF startups.

Investment Criteria

  • Company's technology and market are appealing for investment
  • Participation of co-investor who meets WARF's criteria
  • Sufficient cash can be raised for the company to reach commercialization and ultimately bottom line profitability
  • An independent and fair valuation has been placed on the company
  • Professional management is in place or will be in the future per an existing plan, with recognition that some inventors/founders may be able to transition to management roles
  • Favorable assessment of the company's performance by WARF staff involved in the management of the company prior to the cash investment request
  • Favorable recommendation by WARF's internal Startup Committee
  • Approval of investment in the company by the WARF Board of Trustees

Co-investors

WARF requires co-investors for any of its startup companies that it considers for investment purposes. Suitable co-investors are used to supplement WARF's internal resources and help mitigate conflicts of interest when making cash investments into startup companies. Co-investors assist WARF in multiple ways:

  • Establishing the valuation of the company in the financing round
  • Serving as a source of due diligence on the investment to supplement WARF's internal knowledge, such as validation of the technology and assessment of the market analysis, business plan, and management talent
  • Providing post-investment oversight of the startup company, including review of management performance and company financial status, and initiating preventative actions as necessary

Given the importance of their role, co-investors must meet an acceptable standard to become WARF's partner in these cash investments. The following characteristics are sought in potential co-investor firms:

  • An organizational structure that ensures the partner will remain with the investment through its life, as most frequently is seen in limited partnership structures with long lives, and general partners whose interests are aligned with their limited partners.
  • Verifiable and relevant track record
  • Available capital to support a company, or verifiable access to a syndicate of investors willing to provide necessary capital

Most institutional quality venture capital groups meet the criteria but are not the only acceptable co-investors. Other investing groups also may have organizational documents and track records that meet the first three criteria.

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