If the technology maestros at the University of Minnesota get their way, the U will create two multimillion-dollar venture capital funds to finance young firms that want to license products created on campus.

The U's Office of Technology Commercialization is proposing a $20 million fund that would provide seed capital to start-ups that want to further test and prove the real-world marketability of technologies created in school labs. A second fund would invest $50 million in equity venture capital to new companies nationwide.

John Merritt, spokesman for the U's office of the vice president for research, said the ongoing struggle for tech companies to find seed money is what sparked the idea.

"Part of what is driving this is the extreme difficulty in finding funding for start-up companies, especially for early-stage technologies that come out of university," he said. "That is why you are seeing this trend developing where universities and institutions of higher education such as Michigan and Illinois are creating their own funding mechanisms."

The proposed funding, which would start in 2013, first must gain approval from the U's Board of Regents. A board subcommittee will hear the proposal next Thursday, and it will be presented for a full board vote in February. University officials expect the investments to be made over the next 10 years.

If the plan moves forward, the U will create its two investment funds from a blend of fundraising activities and licensing royalties. The goal is to provide applicants with small chunks of capital ranging from $100,000 to $250,000.

"It's something we have been considering for a couple of years now," Merritt said. "But given the recession, it was not a good time to be proposing or rolling out something like this."

Dee DePass • 612-673-7725