An important new piece of legislation that affects Iowa’s startup ecosystem passed the Iowa Legislature earlier this month and sits on the governor’s desk awaiting her signature. SF2453 is a no-brainer: it’s a win for Iowa’s universities, Iowa’s researchers, and Iowa’s economy.
Here’s why it matters.
Iowa State, the University of Iowa, and UNI are generating world-class innovation in ag, healthcare, bioscience, aerospace and more. The researchers and students doing that work deserve a commercialization ecosystem that keeps pace with their ambitions. Now we’re building one.
SF 2453 simply requires that 1% of eligible endowment assets be invested in Iowa Innovation Funds — funds required by law to invest only in Iowa companies. Instead of being invested in coastal venture funds, those dollars stay in Iowa, invested in Iowa research, building Iowa companies, hiring Iowa graduates. The Legislature’s nonpartisan fiscal analysts estimate that translates to roughly $39 million directed into Iowa’s innovation economy. And the returns from those investments have a major multiplier effect that all stays in Iowa:
- University spinouts get funded
- Royalties flow back to the universities that created the IP
- World-class researchers choose Iowa because the commercialization infrastructure exists
- Top students follow the research
- Iowa employers get the talent
- Iowa’s startups can thrive here
The best universities already understand this model. The University of Chicago set aside $25 million of its own endowment to invest in campus spinouts, because as their Chief Investment Officer put it, they wanted to “invest in companies that grow and create economic opportunities here.” The results have been so encouraging that they launched a second fund on top of it. SF 2453 asks Iowa’s universities to do the same thing, with 1% of their endowment, as a matter of state policy.
This is exactly what great research universities should want: A stronger startup ecosystem that amplifies the value of their own research, attracts better faculty, and gives graduates a reason to stay.
It now sits on the governor’s desk. Iowa’s universities, researchers, employers, and entrepreneurs are all on the same team here. I hope she signs it.
Eric Engelmann is general partner at ISA Ventures.
