Key Takeaways
- • University of Waterloo endowment commits up to $5 million from its $800 million endowment to launch Velocity Fund II, marking the first time a Canadian post-secondary institution has invested endowment capital into a venture capital fund.
- • Velocity Fund II is targeting a total raise of US$25 million and aims to announce a first close in Q1 2024, with the fund operating independently from both the university and its Velocity accelerator.
- • The fund will invest primarily in early-stage companies incubated through UWaterloo's Velocity accelerator, which has historically launched over 300 startups, providing the endowment with a new revenue stream on university-generated research.
- • UWaterloo's unique intellectual property model—where inventors retain 100% of IP ownership and income—has driven entrepreneurial talent but historically limited the institution's direct financial returns; this VC fund addresses that structural limitation.
- • General Partner Ross Robinson is leading capital raising efforts and expects to close additional institutional investors beyond the university's anchor commitment.
Summary
After 15 years of incubating Canada's startup ecosystem through its Velocity accelerator, the University of Waterloo is shifting from pure mentorship to direct capital deployment. The institution's endowment will invest up to $5 million of its $800 million asset base into Velocity Fund II, establishing a precedent for Canadian higher education institutions entering venture capital investing. This marks the first time a Canadian post-secondary endowment has created and funded a dedicated VC vehicle.
Velocity Fund II is being structured as an independent entity, operating separately from both the university and its accelerator operations. The fund is targeting a total capitalization of US$25 million and is actively raising from institutional investors, with general partner Ross Robinson leading capital formation efforts. According to statements from Michael Ashmore, chair of the endowment's finance and investment committee, this represents a strategic inflection point for the institution's investment policy. The fund aims to announce its first close during Q1 2024.
The fund's investment focus will center on early-stage companies built at UWaterloo, many of which have graduated from the Velocity incubator's 15-year operating history. The Velocity program has successfully launched over 300 companies, creating a defined deal pipeline for the new fund. This structure addresses a long-standing constraint for the university: while UWaterloo's policy of allowing founders to retain 100% of intellectual property ownership has proven highly effective at attracting entrepreneurial talent to campus, it has historically limited the institution's ability to capture financial returns on research and innovation conducted at the school.
The endowment fund strategy represents a pragmatic solution to a perennial challenge facing Canadian post-secondary institutions—generating revenue from university-generated research and startups without compromising the IP ownership policies that drive talent acquisition and retention. By investing capital rather than claiming equity stakes, UWaterloo's endowment can participate in venture returns while preserving the founder-friendly model that has become central to its competitive positioning in North American innovation ecosystems.
Velocity Fund II is being structured as an independent entity, operating separately from both the university and its accelerator operations. The fund is targeting a total capitalization of US$25 million and is actively raising from institutional investors, with general partner Ross Robinson leading capital formation efforts. According to statements from Michael Ashmore, chair of the endowment's finance and investment committee, this represents a strategic inflection point for the institution's investment policy. The fund aims to announce its first close during Q1 2024.
The fund's investment focus will center on early-stage companies built at UWaterloo, many of which have graduated from the Velocity incubator's 15-year operating history. The Velocity program has successfully launched over 300 companies, creating a defined deal pipeline for the new fund. This structure addresses a long-standing constraint for the university: while UWaterloo's policy of allowing founders to retain 100% of intellectual property ownership has proven highly effective at attracting entrepreneurial talent to campus, it has historically limited the institution's ability to capture financial returns on research and innovation conducted at the school.
The endowment fund strategy represents a pragmatic solution to a perennial challenge facing Canadian post-secondary institutions—generating revenue from university-generated research and startups without compromising the IP ownership policies that drive talent acquisition and retention. By investing capital rather than claiming equity stakes, UWaterloo's endowment can participate in venture returns while preserving the founder-friendly model that has become central to its competitive positioning in North American innovation ecosystems.
Go deeper than the headline
Research every firm in this story, track the ones that matter and get the daily briefing — free for 7 days.