The University of Chicago has announced plans to invest $25 million from its $7.1 billion endowment in startups led by faculty, students, staff, and alumni.

The university's Office of Investments, which manages the endowment, will oversee the UChicago Startup Investment Program as part of its private equity and venture capital portfolio. The university anticipates investing in three to four new companies a year, for ten years, with the maximum initial investment in each case the lesser of $500,000 or 20 percent of the investment round. The university will require an established venture capital firm to lead each investment round and take a seat on the boards of the companies that receive investments.

Staff at the university's Polsky Center for Entrepreneurship and Innovation will vet candidates for investment — including those from the center's technology commercialization and licensing team — and recommend promising companies to the investment office.

"The university is continuing to expand its commitment to support our students and faculty across the institution who are engaged in entrepreneurship," said UChicago president Robert J. Zimmer. "By co-investing in new companies that have independent investments by established firms, we will enhance university-wide support for startups while encouraging venture partners to explore investment opportunities coming out of the university."

"In addition to fostering innovation, we hope the UChicago Startup Investment Program will encourage our partner venture capitalists to take a deeper look in the Midwest and Chicago specifically," said university vice president and chief investment officer Mark Schmid. "We want to invest in companies that grow and create economic opportunities here and participate in the resulting benefits."