I just went to an MIT Enterprise Forum event on raising money from sources other than VC's.
One company succeeded in the government's SBIR program. See this previous post on my experiences with the SBIR - I'll leave it at that and move on with my point.
Another company formed a partnership with a big company to market a product using their technology. That partnership was possible because of the contacts made by winning the MIT $50k business plan competition in 1997. The company was an MIT AI Lab spinoff.
A third was an MIT Media Lab spinoff that was funded by the MIT based Auto-ID center, which is developing RFID technology.
I guess my takeaway from the night is that the best source of non-VC funding is to have great MIT contacts :-).
I was a little in awe of the power that the MIT network projects. Just organizing events like this is impressive. The panel was broadcast by satellite to twenty-some audiences of MIT alumni around the world. They handled questions by phone from the remote sites. There were supposedly 1000-2000 people attending in all. They had AV-techies with headphones, dressed in black, scurring around to make it all work. They edit these broadcasts, and sell the resulting videos. Of course, the event had a blue chip list of corporate sponsors. I find it truly amazing that a college can do those sorts of things, and attract the caliber of audience that they get.
I went to Carnegie Mellon for my Ph.D., and I'm damn proud of it. They try, but they would never be able to put on an event like this. Being located in Pittsburgh is a big drawback for them. They don't have the VC's and law firms to draw from.
The network of valuable business connections is why MIT has better luck than anyone in turning their technology into working companies.
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