U-M adds more tenants to Venture Accelerator
The University of Michigan has officially inked deals to house two more startups at its Venture Accelerator in Ann Arbor, MI.
Engxt and Civionics will join inaugural tenant Life Magnetics at the former Pfizer research and development center located at the school’s North Campus Research Complex. Two additional firms, 3D Biomatrix and Phraxis Pharmaceuticals, are also close to signing leases, accelerator officials say.
U-M purchased the NCRC site from Pfizer in 2009 after the drug company closed its Ann Arbor facility. The accelerator, 16,000 square feet of offices and labs, aims to give startups with connections to the university a space with resources such as lab equipment and access to mentors that could help them become more viable companies, faster.
Eventually, the accelerator will house 15 university-bred companies.
“We already know our current and future tenants,” says Ken Nisbet, executive director of the school’s technology transfer office. “It’s like family.”
Engxt has yet to be officially spun out of the university. Based on technology originally designed for the Mars Landing Probe, the startup is developing a system that can monitor static electricity levels in facilities that make sensitive computer chips.
Civionics, launched last year, develops sensors that it hopes can detect signs of bridge damage and avert disasters like the notorious 2007 Minnesota bridge collapse.
Rent is not cheap. Even with a university discount, tenants will pay $35 per square foot for wet lab space and $15 to $20 per square foot for office space.
Given the facility’s high quality, Nisbet thinks the startups are getting good value for their money. Nevertheless, such expensive leases might turn off cost-conscious investors.
The success of any accelerator depends on how fast it can get companies out of the door, partly to make room for other technologies brewing in the university.
Plus, investors would prefer companies invest their capital into developing technologies versus paying above market rate leases. Therefore, both investors and the university will want the startups to develop as fast as possible so they can eventually move out and find new (and cheaper) digs.
“We were never going to make money” off the accelerator, Nisbet says. “We’re not trying to compete against the private sector.”