By Sean Wetselaar
Ryerson’s charity status prevents it from investing funds in student startups, so it found a loophole.
Ryerson Futures Inc. (RFI), quietly established May 28, 2012, is a for-profit company designed by the school to connect outside investors with students working in either the Digital Media Zone (DMZ) or Innovation Centre for Urban Energy, Ryerson’s business incubators.
“There were groups of investors who wanted to invest in different companies that the students had.
The university cannot do that by its charter [and non-profit status],” said Ryerson President Sheldon Levy.
“So we had to create a separate organization called Ryerson Futures to be able to work with investors.” The company, still in its infancy, pairs investors with student projects, though Levy said both parties get a say before a deal is finalized.
After the startups have invested the money and given their benefactor a return on their investment, RFI will retain a chunk of the earnings and “the university owns all of the profit,” Levy said.
Matthew Saunders, president of RFI, said in an email that the fund to be distributed to students is still in development, and no definite numbers on investments are available.
Saunders added the RFI team looked into other models of such companies to determine a structure. Similar organizations may exist in other schools such as York University, Levy said, but RFI’s exact model is relatively new.
RFI’s stake in a return on investment varies depending on amount of money invested, and the allocation of their income is to be determined by the school.
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