A Q & A about the U-M's Third Century Initiative and Michigan Investment in New Technology Startups
Third Century Initiative (TCI)
What is the Third Century Initiative?
It is a focused $50 million, five-year investment in the academic future of the university through development of innovative new opportunities in teaching and scholarship.
TCI’s two components are action-based immersive learning experiences, and development of creative approaches to the world’s greatest challenges and opportunities. We have strong models in both, and we must develop more.
The initiative will unlock innovative ideas — from faculty, students, and staff—and accelerate the best of them.
Why are you doing this?
Our students must have the skills and experiences required to be effective leaders — with the confidence to innovate, be entrepreneurial, and reinvent themselves. The advancements in immersive learning will ensure that U-M alumni are prepared fully to lead through the coming decades.
In the area of scholarship, the initiative will help develop innovative ideas about local and global challenges and opportunities, and will advance the greater good — securing Michigan’s future position as the world’s leading public research university.
Can you give examples of what might receive funding?
Our objective is to stimulate innovation and support the most promising ideas from our faculty, students and staff. Some highly creative ideas already have been received. We look forward to considering those and countless more within TCI’s five-year span.
Examples of the types of programs that could receive funding include such work as stimulating entrepreneurship and economic revival in the state of Michigan, transforming K-12 education in the United States, developing “disruptive” transformative technologies, sustaining the Great Lakes, and elevating the role of creativity and the arts in developing critical thinking skills.
How will this be funded, and who will decide how to direct/award funding?
TCI uses existing dollars, funds from schools and colleges on the Ann Arbor campus.
We are still consulting with some key faculty and academic leaders, but a robust and collaborative review process is anticipated. We will use multiple programs and mechanisms to make the allocations.
How will the success of this initiative be evaluated?
Evaluation will be based on qualitative assessment of advances that emerge from the initiative; of the level of engagement on campus; of the number of students involved in experiential learning, etc. We also will be looking at what sorts of advances emerge.
Why $50 million? Why five years?
The amount is substantial enough to have a meaningful and sustained impact. In five years the university will launch its third century, and the Third Century Initiative will help ensure that we are positioned for and can act upon the future that awaits us.
Will this only be directed to faculty or could it be directed elsewhere for ideas that meet this vision?
We will welcome suggestions from all sectors. Remembering that student learning is one of the two major objectives of the initiative — this definitely includes students.
How can the university afford to undertake this effort?
The fiscal constraints of the last 10 years have led to strong budget discipline on our campus including a focus on efficiency of operations, cost-cutting and reallocation from lower priorities to higher priorities. But financial restraint is simply a means to an end.
It has allowed us to enhance the foundation of our academic enterprise during the last few difficult years with 150 new faculty lines, large investments in need-based financial aid and investments in facilities. That same budget discipline has allowed us to put together the resources for the Third Century Initiative by reallocation of academic funds from lower priorities to this high-priority initiative for the campus.
Is it the right time to make such an investment?
Yes. Even in the most challenging times, we have invested in ourselves — building the Law Quad during the Depression, the University Hospital during the recession and purchasing the North Campus Research Complex during the more recent recession. Our donors have supported us during these times as well — all so we can maintain our excellence and put the university in an excellent position for the upcoming decades.
Michigan Investment in New Technology Startups (MINTS)
What is MINTS?
It is a new program to invest in university startups.
How will this work?
Once a startup has secured an initial round of funding from an independent venture capital firm, it will be eligible for up to $500,000 of financing from the university through MINTS.
Why is the university doing this?
We will make funds available for these investments because we believe in the work of our researchers and we believe in delivering strong returns on our endowment.
Is the university taking funds out of the endowment to pay for this?
We are diversifying our assets within our endowment. This is money we continually invest — and MINTS will invest directly in technologies and ideas of our researchers.
What funds will be invested in this?
This will be an investment in the long-term pool and will be treated the same as any other investment in the LTP.
What percent of total endowed investments does this represent?
The $25 million gross investment is scaled to be a meaningful venture capital investment. The endowment in total is $7.8 billion.
Does the university have research to support this investment approach?
Yes. Our financial experts have studied U-M startups for the past 20 years, and their analysis shows, if we had invested in the startups, returns would have been competitive with the returns on our venture capital portfolio.
Simply put, University of Michigan startups are a good financial opportunity. And the historical data have convinced us now to invest a small portion of the endowment in startups from all three campuses.
How flexible is the amount of money that is being invested in university start-ups? Are there some that won’t be funded?
We will invest as much as 2.5 percent of funds raised in a round of financing up to a maximum of $500,000 per round for all startups that meet the criteria noted earlier. We will not choose winners at such an early stage.
How long will it take before the university sees results?
MINTS is launching this year, and it will take time to deliver rewards. It may well take 10 years, in fact, to realize returns, but that is the nature of investing in startups and we are prepared for it.
How will this help the Michigan economy?
Since so many startups are based in our state, we are helping to accelerate businesses that contribute to the Michigan economy.