How MIT’s Solve Innovation Fund Will Help Early-Stage Entrepreneurs Solve Global Challenges
MIT Solve — an initiative of the Massachusetts Institute of Technology — is known for advancing lasting solutions from tech entrepreneurs to address some of the world’s most pressing problems. Every year, Solve issues four Global Challenges to find most promise Solver teams in order to drive transformational change. Then Solve deploys its global community of private, public, and nonprofit partners to collaborate with the Solver teams to help scale their impact.
Over the last couple of years, Solve and its partners brokered commitments of more than $12 million in funding to tech entrepreneurs along with providing in-kind support and resources. This year, Solve’s open challenges (open until July 1) includes Circular Economy, Community-Driven Innovation, Early Childhood Development, and Healthy Cities.
The launch of the new philanthropic venture fund known as Solve Innovation Fund was announced at MIT Solve’s annual meeting earlier this month. And MIT Solve is now seeking to raise $30 million for the Solve Innovation Fund in order to focus on early-stage entrepreneurs for solving global challenges. Over time, the Solve Innovation Fund will raise the $30 million from philanthropic donors who can contribute through tax-deductible gifts to MIT.
“Solve’s mission is to tackle global challenges by helping early-stage innovators from all around the world connect with each other, tap the strength of MIT’s innovation ecosystem and, crucially, gain the resources to transform their ideas into impactful solutions. The Solve Innovation Fund is an inspiring step to providing Solver teams with the capital to deliver their solutions at scale,” said MIT President L. Rafael Reif. “As an MIT graduate and a pioneering leader in Greater Boston’s biotech community, Noubar Afeyan has a remarkable record of translating promising ideas into serious impact. As Solve launches this novel approach to funding innovations to advance social good, we are profoundly grateful to have Noubar as a supporter, an ally, and an inspiration.”
So far, Flagship Pioneering CEO and MIT Corporation member Noubar Afeyan has committed up to $3 million to the fund. Ever since life science innovation enterprise company Flagship Pioneering was founded in 2000, it originated and grew more than 100 scientific ventures that transformed human health and sustainability and created over $30 billion in aggregate value.
“I am happy to back the MIT Solve team helping launch the Solve Innovation Fund and providing critical funding for Solver teams addressing the world’s most pressing problems and the UN Sustainable Development Goals,” added Afeyan. “The Fund serves as a first-of-its-kind, innovative philanthropic vehicle for unlocking significantly more capital towards early stage social entrepreneurs everywhere.”
The Solve Innovation Fund is going to make debt and equity investments in for-profit Solver teams selected through Solve’s annual open innovation Global Challenges. And returns from Fund investments will be reinvested into future Solver teams — which allows donor money to be recycled several times through the Fund and create a pay-it-forward mechanism for Solver teams. The Fund is going to be set up as a Donor-Advised Fund (DAF) — independent to and external to MIT — with MIT Solve acting as the donor-advisor.
The Solve Innovation Fund is being led by MIT Solve Principal Casey van der Stricht and it will serve as a model to unlock more DAF capital towards early-stage innovation to achieve the UN Sustainable Development Goals. DAFs have been a rapidly growing philanthropic giving mechanism — which has accounted for over $110 billion of capital across the US overall. Out of this $110 billion, a small percentage is estimated to be invested for impact and even less of this capital being allocated to venture impact investing.
“We are excited to announce the launch of the Solve Innovation Fund, a philanthropic investment vehicle designed to help address the early-stage innovation gap, and to grow the pipeline of investable, marketable solutions to pressing problems facing the world,” explained MIT Solve’s Executive Director Alexandra Amouyel. “Thanks to the generous support from Noubar Afeyan—and we hope many others who will join—the Solve Innovation Fund will sustainably invest in Solver teams and their success.”