Stanford Launches Venture Fund

Standford has launched an on-campus venture fund: SSE Ventures.

In business school I took a course called "Managing Innovation", which I had hoped would focus mostly on a subject I consider to be a personal specialty: the difficulties of leading teams of highly intelligent, curious, independent individuals toward the accomplishment of a unified goal. In fact, we studied only a little in that line, but focused much more on the organization of innovative networks (network in the non-geek sense), and communities.

One thing we studied at length was the phenomenon of communities—usually attached to a geographic area like Silicon Valley or the Boston Rt. 128 corridor—becoming super-innovative powerhouses supporting the virtuous circle of technological invention, successful businesses development, and high returns capital investment which then feed back into the system.

Nations, states, and regional communities often try to synthesize these communities from scratch, by offering tax- and other incentives to would-be entrepreneurs, hoping to spark creation of a technological center akin to Silicon Valluy, which lead to higher rates of employment and transform the local tax base.

If my memory of the class serves, the following components are all requisite (but do not guarantee) for such communities to develop and flower:

• Academic centers of technological innovation
• Access to ready capital
• A few seed power-house businesses in the specific vertical where the community will excel

And the key ingredient, missing in nearly every synthetic, non-organic "tech center", and the one thing missing in Rt. 128 which lead to Silicon Valley—and not Boston—becoming the king of microprocessor innovation and manufacturing:

• A culture of cooperation and collaboration, rather than secrecy, ownership and protectionism.

I don't see this new venture fund materially changing the capital structure of the regional tech powerhouse that is Silicon Valley. There's already plenty of capital on Sand Hill Rd., and indeed anywhere else a promising young Stanford entrepreneur might turn. But if the fund's intent isn't to cherry pick the most outwardly promising-looking candidates, such a fund, willing to providing capital a bit earlier than the area's more established venture and angel investors, could definitely kick-start careers and further strengthen the S.V. tech community. More and younger companies keep talent in the area and draw more talent, and the myth of Internet-powered, globally distributed high-tech industries fades still further into the background.