SCALING VENTURE-CAPITAL INVESTMENT

The student-led Wolverine Venture Fund (WVF) turned in another strong year, assessing new investment proposals and participating in a $25 million Series D round investment in Sonitus Medical, a medical-device company focused on advanced hearing solutions. Based in San Mateo, Calif., Sonitus has developed a revolutionary prosthetic device that relies on bone conduction to transmit sound via the teeth. This trademarked SoundBite system holds great promise for patients suffering from hearing disorders. The WVF’s recent follow-on investment, announced in May, is its second investment in Sonitus since 2011.

Today, the $5.5 million WVF manages a venture-capital investment portfolio of 14 companies across various industries, ranging from telecommunications, digital marketing, and advanced materials to medical devices, environmental services, and biomedical. While Ross School MBA students constitute the majority of the fund’s 24-member student management team, the WVF also attracts graduate students from engineering, law, environment, public policy, medicine, and other disciplines.

“There’s a great advantage to this interdisciplinary-team approach,” says Erik Gordon, the fund’s advisor, and the recently appointed director of the Zell Entrepreneurship And Law program at the U-M Law School. “It reflects the fact that the University, as a whole, is becoming much more active in entrepreneurship, and that the Ross School and Zell Lurie Institute are playing a leading role in this campus-wide expansion, which has top-tier support from U-M President Mary Sue Coleman. It’s a very cool time for entrepreneurs all over the University.”

Nicholas Douville, MD/Ph.D. ’14, a doctoral candidate in biomedical engineering, participated on the due-diligence team that vetted the WVF’s follow-on investment in Sonitus. “The composition of our team exemplifies the diverse strengths students bring to the due-diligence process,” he explains. “We had students with backgrounds in law, finance, and consulting. I brought a background in science and medicine. By leveraging our skill sets, we performed thorough due diligence on the investment opportunity, while learning a great deal from each other. We also had the unique opportunity to interact with the company’s chief executive and high-level management. It was a student fund at its very best.”

Douville says his past two years on the WVF have filled in some critical gaps by familiarizing him with the nonmedical factors − leadership, management, finances, intellectual property, and timeline to market entry – that are essential for making scientific innovation practical on a larger commercial scale. “Too often, researchers who make discoveries or invent new products lose control over the development of their technologies because they lack commercialization skills,” he explains. “The Wolverine Venture Fund has given me insight into how this is done.”  Douville plans to apply his experience in his future career. “Ideally, I would like to work in an academic medical center with clinical and basic science thrusts, and help to integrate those two aspects,” he says.

Gordon anticipates Douville and other fund members will be able to put their venture-investing skill sets into play, regardless of whether they start a company in their garage, become a venture capitalist or take a job in industry.  “Every company leader wants people who can spot a valuable opportunity, shape that opportunity into one that is viable, and deal with risk,” he says.

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