Feb. 26, 2014

By Carrie Wojcik

Imagine someone has an idea, a technologically advanced idea, that has the potential to appeal to people everywhere and potentially change how people interact with each other or do daily activities.  The great idea exists, but there are no funds to support it.  As a result, the idea never is able to become a reality.

Wisconsin Economic Development Corp. (WEDC), the UW-Extension and the University of Wisconsin system offers the seed fund that helps great ideas turn into realities.

New Idea Concierge and Program Manager Idella Yamben said the Ideadvance Seed Fund provides an opportunity for students or faculty entrepreneurs apart from the UW-Madison to acquire the resources they need to potentially commercialize their idea.

“The focus is discovering your product or service’s true fit in the market by ‘getting out of the building’ and validating your customers and business model to save you both money and time,” the Ideadvance webpage states. “Through Lean Startup methodologies, access to expert business consultants and support from the New Idea Concierge, you will determine how your great idea most effectively reaches customers.”

The Ideadvance Fund provides $75,000 to commercialize products or services being developed by student or faculty entrepreneurs.  The money is received throughout the two stage process that takes place, and milestones must be achieved for the money to be distributed.

Yamben said these funds could cover legal fees, rent and building a prototype.

“The fund is to help them [entrepreneurs] walk through different commercialization milestones and really determine the most strategic market for their product or service,” Yamben said.

The Ideavance Seed Fund is a cost-effective way to test the ideas entrepreneurs have.

The program allows for any student or faculty member apart of any discipline to apply for aid to commercialize an idea they have related to technology or sciences, Yamben said.

According to the Ideadvance webpage, the idea behind the fund is to be a source of capital to ideas, so ideas can be de-risked and re-evaluated by the entrepreneur.

“The goal of the program is for them [the entrepreneur] to determine if this is a good idea that has a business model attached to it,” Yamben said.  “Not every great idea can be turned into a profitable business.”

The Two Stage Process

The funds are distributed in two stages.  In the first stage, the entrepreneur will receive $25,000. This stage is essential to developing the specifics of the idea, including the market and utilizing local resources that are available.

“By the end of stage one, we really want them [the entrepreneur] to determine if their idea might become a good business, and in stage two, we want them to have started their business and receive some investment from other groups,” Yamben said.

In second stage, the entrepreneur will receive $50,000 to commercialize their idea and develop a business model that satisfies customers’ needs.

Ideas are developed through “Lean Startup methodology.”  To learn more about this, please visit http://theleanstartup.com/principles.

The Application Process

There are three application periods throughout the year, the first period opening in March with a close date in April.  Yamben said entrepreneurs applying need to consider potential market and customer base, as well as competitive advantage and value proposition.

“You need to have a working idea of how your business would operate,” Yamben said.

The proposal includes 11 elements regarding the product or service being proposed, and each element has to be addressed in the proposal with 250 words or less.  Yamben said there needs to be some thought to how money will be utilized to commercialize the idea the entrepreneur has.

Some conditions do apply.  Both part-time and full-time faculty, staff and students who are a part of the UW system are allowed to apply.  Those who are associated with UW-Madison are not eligible to apply but are allowed to contribute to projects of other staff or students from other UW colleges.

High-tech ideas are essential, but types of businesses that are eligible according to the Ideadvance webpage include  manufacturing, agriculture, music production, business, art or textiles, but business that are not eligible include direct consumer retail, hospitality businesses and real estate.

People who are interested in applying for Ideadvance seed fund can contact Yamben.

“The idea [for the Ideadvance Seed Fund] comes from a need we had in the state, and we know that UW faculty and students were generating great ideas in technology that could become businesses,” Yamben said.  “Often times those ideas need more resources to reduce the risk so that other people will want to invest in them.”