The University of Waterloo (UW) is replacing its grant model with one that will let angel investors make direct equity investments in local early-stage companies. Its startup incubator, Velocity, is looking to raise more than $1 million for an investment fund under the new model, which it expects to launch in March. The fund is powered by AngelList’s Angel Funds platform, which launched in Canada in June 2018. (Financial Post)

Talking point: Velocity has held pitch competitions three times a year since 2011, at which four winners each received a $25,000 grant—meaning the incubator has been paying out more than $300,000 per year. This new fund will replace those grants; winners will now be offered $50,000 as an equity investment. UW benefits from the change because its philanthropic capital can now be redirected to other areas, like incubator facility upgrades. But the risk for the university: Velocity will now be judged on the return-on-investment it can create for angel investors. Velocity director Jay Shah acknowledged this, saying, “We’re ready to keep building on the last decade of work to maximize success for startups turning into scale-ups and, by extension, we’re willing to be measured by a more explicit dollars-and-cents performance.”