Accelerating the future

By Anissa Gabbara | Photos courtesy of Intero Biosystems

What’s discovered at the University of Michigan can change the world. 

This is a sentiment shared by many, including Kelly Sexton, associate vice president for research - innovation partnerships and economic impact, who leads Innovation Partnerships, U‑M’s research commercialization arm.  

Just last year, U‑M had over $2 billion in research activity across all three campuses, generating a vast amount of new technologies and research discoveries, which have led to life-saving treatments, job creation, a stronger innovation ecosystem in the Great Lakes region, and more. The Accelerate Blue Fund, an evergreen, early-stage venture fund dedicated to investing in U‑M licensed startups, is bridging the funding gap for new companies working to bring these technologies and discoveries to market.

Laying the groundwork

When the AB Fund was established in 2019, there was only one problem, according to Sexton: a lack of funding. 

“The Accelerate Blue Fund would not be in existence, but for the generous support of University of Michigan alumni and friends who understood the problem we were trying to solve and wanted to make sure that Michigan had world-class startup infrastructure in place to help us capitalize and take advantage of these incredible research discoveries,” Sexton said. “Thanks to donor support and university support, we’re now at just over $16 million in assets under management by the fund.”

To date, the AB Fund has invested $9.2 million across 32 startup companies. Designed to lay the foundation for the early success of university startups, the AB Fund prepares these companies for venture capital, helping them take that next step in their growth. 

Idea to traction

Charlie Childs (MS ’24, PhD ’24), co-founder and CEO of biotechnology startup company Intero Biosystems, knows firsthand how challenging it is for early-stage ventures coming out of academia to receive funding. 

“Traditional investors see companies like ours as really risky since we are so early, don't have any revenue, and a lot of times, the founding team is very academic with no track record of commercialization. There is a big funding gap between academic research and commercialization,” Childs said.  

Launched in 2024, Intero is transforming drug discovery, boasting the first-of-its-kind, adult stem-cell derived miniature human intestine coined GastroScreen. Intero’s flagship product was developed at the Medical School by Childs and her co-founders Madeline Eiken (MSE ’23) and Jason Spence, the H. Marvin Pollard Collegiate Professor of Gastrointestinal Sciences and a professor of internal medicine, cell and developmental biology, and biomedical engineering.

GastroScreen functions just like a human intestine. The lab-grown, 3D mini-organ includes everything from the intestinal lining to tissues such as neurons, blood vessels, and muscle, allowing researchers to test drugs for safety and efficacy before going into human clinical trials. Additionally, this game-changing technology can reduce the amount of animals used in research. 

Childs credits the AB Fund for providing early-stage support to Intero. She also acknowledges the role of donors, whose investments are enriching Michigan’s entrepreneurial ecosystem. 

“Donors are absolutely critical; the Accelerate Blue Fund and all of its investments wouldn't be here without them,” Childs said. “The importance of donors who allow Accelerate Blue to take that pivotal next step into closing this gap in supportive capital and launch from an idea to real traction can't be understated.”

‘Ecosystem of support’

One of those donors is Jon Oberheide (BS ’06, MS ’08, PhD ’12). Despite obtaining multiple degrees from U‑M, Oberheide admits he’s never been an academic at heart. 

“I always had the entrepreneurship bug,” he said. 

After graduate school, Oberheide co-founded Duo Security, an Ann Arbor-based cybersecurity startup, along with Dug Song (BS ’97). Operating worldwide, Duo (acquired by Cisco in 2018) currently protects more than 100,000 organizations against cyber threats. While forming Duo, Oberheide realized how difficult it is for U‑M founders to access talent, capital, and infrastructure needed for early-stage startups. The dearth of early-stage funding in Michigan makes it all the more challenging. 

With all this in mind, Oberheide made it his mission to support funds like Accelerate Blue, ensuring that the next generation of startups are equipped for success.   

“Founders need a whole ecosystem of support to maximize their opportunity of success,” Oberheide said. “I hope the Accelerate Blue Fund helps create a paved path for founders coming out of the university and proves that you don’t have to be on the coasts to launch a world-changing company. If we can show that Michigan research and founders can produce startups that scale globally, we’ll keep more talent here, attract more capital here, and inspire the next generation of students to pursue entrepreneurship.”

Remaking the frame 

In Michigan, AB Fund portfolio companies have created 227 jobs since its establishment, giving graduates an opportunity to pursue an exciting career without having to leave the state, Sexton noted.

“Having more innovative startup companies in our backyard creates new opportunities for research collaboration with our faculty, and it just really helps make this a more dynamic and interesting place to live,” Sexton added. 

As for global impact, research discoveries made at U‑M are creating a better world in many ways. In addition to Intero, the AB Fund has backed companies like Auricle (tackles tinnitus) and NX Fuels (works toward cleaner energy). One of the university’s biggest success startup stories, HistoSonics, which offers a noninvasive way to destroy liver tumors, was recently acquired by a consortium of top-tier investors for $2.25 billion, demonstrating the economic and societal impact of U‑M startups. 

Oberheide thinks back to fellow AB Fund supporter and IA Ventures founder Roger Ehrenberg’s (BBA ’87) philosophy: People can be “frame takers” or “frame makers.”

“Do you ‘take the frame,’ passively accepting the world as it is, with all of its challenges and limitations? Or do you decide to ‘remake the frame’ and deliver the change that you want to see for the betterment of society and the world?” Oberheide said. “That is the essence of entrepreneurship and the true impact that the University of Michigan can have on the world.”