Universities are the time to learn, and sometimes the best type of learning is the practical ones that help you understand trade by doing it. Emory University students wanted to learn about venture investment while thinking about how to fund the founders of undervalued startups.They are able to do both with a new venture capital fund called Peach Tree Minority Venture Fund, Will be introduced next spring as part of the classes taken by the students who run the fund.
The idea for this project stems from some research at Emory University Goiseeta Business School. Willie Sullivan and his fellow students, Kristen Little, Chis Anen, and Alan Quigley, were investigating the experience of undervalued entrepreneurs in the Atlanta area where the university is located.
“One of the main things that has always come up when we interview is how big a problem is access to capital for black entrepreneurs. And we are our I was coming up with recommendations. “It was really okay for the university to deal with this problem,” Sullivan told me.
According to Sullivan, the research team understood that this was an old problem and didn’t get a big answer. He also knew that students had been running venture funds at other schools for decades, so finding a way to fund some of these companies while teaching students venture funds. With the goal of, I started to explore the idea of starting a venture fund with Emory. VC.
The team concluded that student-run venture funds are a missing element in Emory’s business education. This could be a great experiential learning opportunity for students to invest in real companies and deal with real money to do all due diligence and analytics. They will do so as a venture capitalist or investor in any company.
But Sullivan said the idea was to do more than that. They also look to Native American and Latin founders as well as black founders, by funding startups that are usually struggling to access capital. I wanted to help close the capital gap I found in my research.
“”[We decided to] Let’s start a fund run by the first student we focus on multiple things. First, we invest in these undervalued minorities, but our goal is to have a variety of people who have been very enthusiastic with this type of entrepreneur while at Goiseta Business School. It is also about creating multiple classes of investors with racial and ethnic backgrounds, “he said.
He said that if schools could generate a new generation of investors who are more accustomed to seeing diverse business groups than typical ventures, these when they go out into the world and join these companies I believe it can bring learning.
But before they set up a venture fund, they needed money. Sullivan spoke with about 12 other school venture funds and said most of them were funded by the wealthy alum. However, when he proposed an idea to Goiseta’s interim dean, Karen Sedator, he said he liked the idea and decided to allocate $ 1 million from school donations as seed capital for the fund.
“She has already really supported the many racial equality and racial justice we have done in school, and we plan all the plans and how to set them up. After that, she basically said, “I want to allocate money from our donations to set this up.”
The research and analysis will be conducted under the supervision of a professor at Goyseta Business School as part of a class in which student investors are part of this group. This course teaches students about the technical aspects of investing and how to create a financial model, such as understanding what a cap table is. We will also consider aspects of investment diversity and inclusiveness, and how to avoid unconscious bias in investment decisions.
The fund is also in the process of establishing an advisory board for the Atlanta Regional Groups, including the Russell Innovation Center, Atlanta Tech Village, and Venture Atlanta. And while the procurement and final decision of the transaction is left to the student, the student can rely on this advisory board whenever there is a specific question that can benefit from the wisdom of an experienced investor. increase.
Venture funds are run by three students who act as managing partners and do most of the organization and transaction sourcing. These students also act as teaching assistants for professors who teach relevant coursework and, like other companies, supervise other students with titles such as senior associates and analysts. When a managing partner graduates, a new managing partner will be selected from the staff of the previous year to improve the continuity of the program.
The company plans to make several investments each year, ranging from $ 20,000 to $ 25,000, and has undervalued its owners by establishing a micro-investment fund of about $ 10,000 a year with four to five checks. We plan to revitalize some companies that may not be there. The attention of traditional investors and banks.
“The other half of what we are aiming for is to help those who have the right idea from the beginning, who have made a few products, and who are even profitable. What they really need is [a small check to get them going]… “
The fund is still in the formation stage, but the first course will start in January and the first investment will be in March. Sullivan and his team created a database of 100-150 companies as a starting point for the class.
“We are doing it a lot [setup] Now that I really know the people there and such things, if those students are trained and we can get started, we just start running and hopefully the first of them in March You can make an investment in it, “he said.
Emory University is launching student venture fund to invest in underrepresented startups – TechCrunch Source link Emory University is launching student venture fund to invest in underrepresented startups – TechCrunch
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