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Student Entrepreneurship Hub opens up shop

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By Connor Murphy


 

Cheers from a crowd of over 100 people boomed in the Campus Center by the small fountain on Jan. 27 as University at Albany officials cut the ribbons off of the Blackstone LaunchPad.

The sleek glass enclosure, decked out with customized tablet stands, a big-screen TV and other smart-room appliances has been labeled an “entrepreneurship hub” by both the university and the multimillion dollar investors from The Blackstone Charitable Foundation.

The Foundation is a not-for-profit offshoot of the Blackstone Group, described by the New York Times as “the largest alternative investment firm in the world,” with over $300 billion worth in assets under management.

“Blackstone LaunchPad is a critical part of a key strategy that you’ve only heard us talk about over the last year,” President Robert J. Jones said at the press conference. “It’s a key part of our strategy and our commitment to enhance the undergraduate experience.”

The LaunchPad opening marks a step towards a more profit-oriented environment for students of any discipline, coming off the heels of a $4.5 million shared investment into five NY schools including UAlbany. University and Blackstone officials said the program has the potential to create 4,000 new ventures and 6,000 new jobs across New York over the next five years.

“Blackstone is a leading global asset management firm,” said UAlbany graduate of ’83 Michael Nash, now executive chairman of Blackstone Real Estate Debt Strategies. “We invest capital on behalf of literally millions of public pensioners worldwide. Because buying and improving companies is a core part of what we do, you can imagine that entrepreneurship is a critical and crucial element of our culture within our firm and our business.”

“When seeking out investment opportunities, we aim to bring our financial and intellectual capital to bear in a way that helps businesses succeed and grow,” Nash added at the press conference.

One university official emphasized the Blackstone Group as a separate entity from the Blackstone not-for-profit, as reported in a previous ASP article. The for-profit, which employs Nash, has been in the sights of federal regulatory agencies and the media for years. On Oct. 7, 2015, or roughly three weeks before the LaunchPad partnership with the NY universities was announced, Blackstone settled with the SEC for $39 million after “they failed to fully inform investors about benefits that the advisers obtained from accelerated monitoring fees and discounts on legal fees.”

From that amount a reported $10 million was paid in a fine, and $29 million awarded to affected fund investors, which ending the SEC’s probing.

“This SEC matter arose from the absence of express disclosure in marketing documents, 10 or more years ago, about the possible acceleration of monitoring fees,” Blackstone said. The practice has been reported as common in the industry, although the SEC has been critical of it.

“Full transparency of fees and conflicts of interest is critical in the private equity industry and we will continue taking action against advisers that do not adequately disclose their fees and expenses, as Blackstone did here,” said Andrew J. Ceresney, Director of the SEC’s Division of Enforcement in their 2015 press release.

The Blackstone Charitable Foundation reported in 2013 tax filings that their parent company and four of its subsidiaries shared $400,000 with the not-for-profit, or roughly over 20 percent of the Foundation’s value at the time.

University spokesman Karl Luntta said there was a written agreement between UAlbany and the Foundation, but refused to state whether the contract was private or public information.

Multiple Blackstone spokespeople have refused multiple requests for comment.

After the LaunchPad press conference, a reception with refreshments was held with university and Blackstone officials on hand to give a tour of the business center. It also served to get students acquainted with LaunchPad employees, some of which were students themselves. One of these employees, UAlbany Graduate of ’87 Jan T. Woodcock, will be executive director of the program.

“My role is to facilitate the goal of the Blackstone LaunchPad, which is really to help all students understand what it takes to start a business,” Woodcock said. He explained that if students worked through his staff with a viable business idea, they could eventually obtain funding for their venture through the LaunchPad’s network.

Woodcock previously worked for one of the “Big Four” independent auditors Deloitte, a distinction shared by Nash, and has been an advisory board member for the university since 2004.

“I am on the board of the business school,” Woodcock added. “I’ve had student intern teams work for me in the past, and I’ve been a judge on a lot of the business case competitions, so I’ve been involved in the university.”

One feature of the LaunchPad this year is a Student Business Plan Competition, which again stresses that students from all disciplines and departments can enter. 33 prizes totaling $50,000 will be given out after tax day in 2016, although a one-page Executive Summary must meet the Feb. 12 nomination deadline and be selected by the competition judges.

Questions regarding the competition can be forwarded to Sanjay Goel, the principal investigator for the Blackstone LaunchPad Project, or at the e-mail launchpad@albany.edu.

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