And he says that it's a geographically diverse crowd, not just limited to big-name schools involved in high technology in the Northeast or in California. The Babson College Seed Capital Fund is a great extension of that. The key difference between venture funds run by colleges and regular venture capital funds is in whom they invest. College venture funds generally restrict themselves to companies that are affiliated with them in some way. Usually, that means the company's management must include alumni, current students or professors.
Companies based in a college-affiliated business incubator also usually are eligible.
In addition to wanting the principals to be affiliated with the school, college venture funds often want to keep closer tabs on their investments and act more hands-on than traditional venture capitalists. Biotech is another sector that receives a lot of campus money. Companies seeking investment must have a product or service that with a potential for a big return on investment in order to capitalize on college venture funds. The company, located in the college's business incubator, is developing fingerprint ID technologies for credit cards, automobile entry systems, documents and other items. The firm qualified for financing from Centennial because its CEO is an engineering professor there and another founder is an alumnus.