At a symposium at the Boston University (BU) Photonics Center this fall, the attendees broke for coffee as usual. But something was amiss. Instead of professors munching cookies and chatting about the latest research, men in suits stood facing blank walls, whispering into cell phones. They are high-powered investors, but they’re not from Silicon Valley-they’re from the research center’s ninth floor.

Better toss out the old stereotypes about academia and get with the latest rage-ivory tower goes venture capital. Bidding to spin off more technologies, boost local economies, and just plain make money, many research institutions and universities are creating their own venture capital funds.

Venture capital has traditionally been the domain of private, deep-pocketed investors hoping to earn a windfall, often by picking off promising university research. Most of the action has centered around big-name schools, such as MIT and Stanford University, located near East and West Coast hubs of venture capital. But now an increasing number of universities around the country want their piece of the pie-and are willing to do what it takes to get it.

The latest example is BU’s Photonics Venture Partners. The fund is privately managed, but the university is both an investor and a manager-one of the firm’s three general partners is Donald Fraser, also the Photonics Center’s director. Working cheek-by-jowl with BU researchers studying blue lasers and quantum communication, the venture capitalists plan to leverage the center’s technical acumen to invest in the rapidly growing field of photonics.

No two of the university funds turned up by a TR survey are exactly alike. Some are wholly-owned subsidiaries, others are independent firms awarded preferential rights to an institution’s technology. They also have varying aims. At BU, the strategy is to invest in any photonics company likely to return a profit. At Vanderbilt University, on the other hand, administrators just christened a $10 million fund that will invest in companies built around the school’s technology.

Larry Steranka, Vanderbilt’s director of technology licensing, says the main reason for the do-it-yourself funds “is that many promising university inventions are simply too early-stage and too risky to interest mainstream venture capitalists.”

But based on a study of schools that have previously tried venture funds, Josh Lerner, a professor at Harvard Business School, thinks university administrators often have unrealistic expectations for financial success. Lerner thinks they also underestimate the challenge of combining the quick-to-move venture culture with rule-bound academia. “It’s very hard to marry these organizational forms,” says Lerner.