Under Armour founder Kevin A. Plank and former Hewlett-Packard chief executive Carleton S. Fiorina, both alumni of the University of Maryland's Robert H. Smith School of Business, have donated $175,000 to establish a fund that will invest in student- and alumni-run companies, the school announced yesterday.
The fund at the business school's Dingman Center for Entrepreneurship adds to a growing list of resources for budding entrepreneurs at the university, business school officials said. A $50,000 portion of the fund has been designated for socially responsible ventures.
The fund, open to students, alumni and faculty at College Park, will invest seed money of up to $30,000 for early-stage companies.
Students can apply through the existing Pitch Dingman program, a weekly business ideas event open to all majors.
M.B.A. students also can get financing through the Dingman Scholars program, which provides scholarships and support to launch business ideas. Alumni and faculty members can submit business plans to the Dingman Center to qualify for the newly created fund.
Melissa Carrier, Dingman Center's director of venture investment, said the center will look to invest in startups whose founders demonstrate a strong commitment, a sound business model and growth potential.
Acquiring capital to launch a company is a still a big challenge, especially for cash-strapped students, said Carrier, who will oversee the fund's management.
"We're establishing a need in the market that's not out there anywhere," she said. "It's an essential part of the Dingman Center trying to help students become successful entrepreneurs."
The Dingman Center's endowment fund is yet another example of how colleges and universities across the country are doing more to nurture business ideas of budding entrepreneurs.
Besides adding entrepreneurship degree programs, schools are increasingly providing mentors, incubators and capital through business plan competitions or other avenues, said Marjorie Smelstor, vice president for Kauffman Campuses and higher education programs at the Ewing Marion Kauffman Foundation, a Kansas City nonprofit group that encourages entrepreneurship.
For instance, University of Maryland's Maryland Technology Enterprise Institute announced last week a new $250,000 pre-seed fund that provides money to select undergraduate students.
The grants ranging from $500 to $5,000 will be given to students in the school's Hinman Campus Entrepreneurship Opportunities and Hillman Entrepreneurs programs who create business plans for new companies that benefit society.
"We just know that there are so many students [starting] these businesses that are under the radar," Smelstor said. "It's not viewed any longer as being an add-on or outside the realm of curriculum."
The Dingman Center created Pitch Dingman several years ago. Business plans have ranged from creating a Craigslist for College Park students to developing a new medical device. The center awards $500 to the winning idea each month.
Plank donates the prize money for an annual Dingman business competition for current and former students called Cupid's Cup. This year's prize totaled $22,500. The competition is named after a business Plank ran in his early years at College Park selling and delivering roses.
He conceived the idea of creating sports apparel that wick sweat from the body to control temperature after being frustrated with how he soaked through T-shirts during football practice. Plank earned a bachelor's degree from the Smith school in 1996 and was special teams captain of the Terrapins football team. He took his company public two years ago.
Plank donated $75,000 for the new fund.
"Building a business is all about passion, energy and drive, but it's also crucial to have the means to get your idea off the ground," Plank said in a statement.
"The Dingman Center is a fantastic resource for students who have great ideas, but need some help making them happen with access to business guidance, feedback and funding."
Fiorina, who earned a master's degree in business administration from the school in 1980, donated $100,000 and designated half to be used for investing in social ventures.
The endowment fund will be donor-financed, but Carrier hopes it will become self-sustaining as investments in new companies produce a return.
"As they become successful, they have additional investment from venture capital or they're acquired or go public, the return comes back to the center and we could continue to invest in more businesses," she said.