Sarah Schmid at Xconomy recently connected with Vinay Bhargava, CEO and co-founder of ed tech startup Mytonomy, to discuss his experience bringing the idea for his company to fruition. Vinay outlines the challenges he has faced and the accomplishments he has achieved, and points to the Social Venture Fund’s role in Mytonomy’s success.
For all the details, check out Sarah’s article in Xconomy here.
The Zell Lurie Institute for Entrepreneurial Studies today announced that its Social Venture Fund, the nation’s first student-led impact investing fund, has participated in a seed stage round of financing in Mytonomy, Inc., a video storytelling platform for college and career advising. The Fund joined lead investor NewSchools Venture Fund and Kapor Capital in the deal. This marks the student-led fund’s third investment and second in the education sector.
The Social Venture Fund makes early-stage investments of up to $100,000 in sustainable, innovative, for-profit organizations that deliver financial returns and place the generation of a significant social impact at the heart of their mission. It is managed by Gautam Kaul, Professor of Finance at the Ross School of Business and by 42 students who have wide-ranging experience in fields that include technology, investment and education. To date, the Social Venture Fund is the only university impact investing fund with active investments. Along with the Wolverine Venture Fund and Frankel Commercialization Fund, the Social Venture Fund completes the Ross’ trifecta of student-led venture funds, managed by the Zell Lurie Institute and which effectively immerses students in experiencing all aspects of venture capital investing.
A team of eight students led by Aamer Ali, MBA ’14, and Dan Rosen, MBA ‘14, sourced the deal and conducted in-depth due diligence on the company. “Mytonomy addresses a key need in the education market and has social impact embedded into its business model, making it an ideal company for the Social Venture Fund to consider,” said Rosen. “In analyzing the opportunity more closely, we were impressed with Mytonomy’s initial traction and customer satisfaction, as well as the notable team, advisors and other investors. We are pleased to participate in this round with well-established players and deepen the Fund’s portfolio of promising edtech startups.”
Mytonomy aims to address the disparity in high school guidance counseling services through a video-based social network, with a special focus on First Generation college students and students studying STEM (Science, Technology, Engineering and Math) fields. With an average caseload of 470:1, college guidance counselors are stretched beyond optimal capacity. Mytonomy helps bridge gaps in capacity by delivering complementary “video support” at scale and at low cost. The company’s video library, which already contains more than 2600 testimonials in both English and Spanish, enables high school and college students to watch videos from near-peers, getting advice on topics related to succeeding in high school, the college application process, and specific colleges, majors, and careers, all with their always-free student accounts.
In addition to the financial investment from the Social Venture Fund, Mytonomy will engage directly with the Fund and Ross on capacity building initiatives, such as high-impact consulting projects, research on the efficacy of its intervention, or development of curriculum related to STEM careers. The Fund will also have the option to participate in future rounds.
“We are pleased to partner with a respected roster of investors to deliver much-needed college knowledge, and to expose students to the careers of the future, especially those communities that are under-represented in the tech industry,” said Vinay Bhargava, Mytonomy CEO and co-founder. “We’re particularly excited to engage directly with the Social Venture Fund to tap Ross’ cross-disciplinary business students as well as those from the School of Education and College of Engineering to further our mission.”
The completion of two first-of-their-kind investments by the Social Venture Fund in 2012 represents a major milestone for the Ross School of Business and the Zell Lurie Institute. Multidisciplinary teams of Michigan students spent more than a year sourcing deals, performing due diligence, partnering with local and national investors, and closing on early-stage investments in two for-profit social organizations: online educator LearnZillion and healthy food supplier Jack & Jake’s. Each business received $50,000 from the fund.
“We are breaking new ground because this is the first student-run socially oriented investment fund in the country, and one of the pioneers in the entire industry,” says Finance Professor Gautam Kaul, managing director of the fund. “Through these two investments, we are demonstrating we can invest in businesses that make money, but are focused first and foremost on societal impacts. The most important takeaway for our students is that business education is supposed to serve problem-solving of the richest kind.”
The Social Venture Fund, launched in 2009, provides students with hands-on learning experience in the areas of social- and environmental-driven venture investing and entrepreneurship. It also supports enterprises that address pressing social needs, which otherwise might not be met, or met as effectively, through more traditional investment channels.
“My real passion is being around innovative social entrepreneurs, either on the investment side or the entrepreneurial side,” says Seth Greenberg, MBA ’12, one of the fund’s student directors. “The Social Venture Fund works at the juncture of business and social enterprise, and offers an incredible learning opportunity to apply private-sector solutions to social problems. Working on the fund has been an invaluable experience for me personally and professionally.”
In April, Greenberg and the due-diligence team led by Emily Airey, MBA ’12, and Daniel Reyes, MBA ’12, joined a syndicate of 17 investors in a Series A round investment, totaling $2.4 million, in LearnZillion, a Washington, D.C.-based for-profit educational organization. LearnZillion has developed an innovative Web-based learning platform to share video-taped best practices from the classroom that students can use to improve their academic abilities in math, science and other core subjects.
“Through the fund, we learned all aspects of the impact-investing and deal-making process, including how to evaluate the investment quality and quantify the social impact of for-profit organizations with social missions,” Greenberg says. A year earlier, in summer 2011, he completed a Marcel Gani internship with Local Orbit, an online farm-to-market start-up, which afforded insight into the challenges and rewards of a social entrepreneur. “Now, I’ve seen both sides of the spectrum,” continues Greenberg, who accepted a position with Ernst & Young’s Consulting Group after graduating from the Ross School in April. “Long term, I’d like to work with a social venture fund or launch my own for-profit social venture to help alleviate a societal problem.”
Dual-degree student Emily Rinner, MBA/MPP ’12, received her introduction to social venture investing and entrepreneurship while conducting due diligence on the sustainable food start-up Jack & Jake’s, the recipient of the Social Venture Fund’s second investment. “I joined the fund because I wanted to understand the role business could play in addressing society’s challenges,” says Rinner, whose primary interest centers on poverty-related public-policy issues. “I learned what a venture-investing firm does, how it evaluates a business, and why it decides to invest. I also gained experience in communicating and building a relationship with a social entrepreneur. This gave me confidence to be an active player in the overall investment process.”
In July, the Social Venture Fund participated in a $225,000 investment round in Jack & Jake’s. The New Orleans-based wholesale food distributor is building a new local food system in southern Louisiana to reconnect local farmers and fishermen with those who need access to fresh, healthy foods.
This fall, Rinner will put her social venture investment skills into practice at Accenture in Washington, D.C., where she will be a management consultant for the federal government and other public-sector and nonprofit organizations. “Through my work on the Jack & Jake’s investment, I developed the ability to quantify the social impact of an organization,” she says. “In my new job, I will be able to help clients apply business practices and measure social impact in hard numbers, so they can become more effective and accomplish their goals.”
The Social Venture Fund today announced that it has closed its second investment this year in Louisiana-based sustainable food provider Jack & Jake’s. Led by founder and CEO John Burns, Jack & Jake’s aims to stimulate the economy and support Louisiana communities by helping local farmers and fishers extend their distribution and sales abilities and bring healthy, fresh food to areas that would not normally have access.
The Social Venture Fund began working with Jack and Jake’s over a year ago with the objective of connecting two groups who need each other- farms and fisheries and community institutions like schools, hospitals and assisted care facilities. As part of the investment, the students, led by Sanjay Vachani (MBA ’12) and Emily Rinner (MBA ’12), “created a set of social metrics against which they can measure the impact of the investment – not just the financial return, but more importantly the degree to which the investment is improving the community and the environment,” explains Burns.
Not only will Jack & Jake’s benefit from the investment, but Zell Lurie Institute executive director Tom Kinnear points out that “the recent deal with Jack & Jake’s provided another opportunity for our students to experience the complexities of double bottom line ventures — balancing social need with a positive return on investment.”
Gautam Kaul, Professor of Finance at the Ross School of Business and managing director of the Social Venture Fund adds, “Our goal as a fund is to support entrepreneurs in the social space and find organizations and leaders who need our support. In this case, our student team did a great job cultivating a relationship and I am confident that both Jack & Jake’s and our Social Venture Fund students will learn a tremendous amount and realize significant value from the business relationship.”
The Social Venture Fund seeks to make early-stage investments of up to $200,000 in sustainable, innovative, for-profit organizations that deliver financial returns and place the generation of a significant social impact at the heart of their mission. Managed by 34 students (29 MBAs and 5 BBAs) with wide-ranging experience in fields that include technology, investment and education, the Social Venture Fund completes U-M’s trifecta of student-led venture funds along with the Wolverine Venture Fund and Frankel Commercialization Fund, all of which immerse students in experiencing the many aspects of venture capital investing.
You may find more information about the latest SVF investment here.
Check out this piece from Tom Henderson on UM’s student-led Social Venture Fund’s investment in LearnZillion:
The Social Venture Fund, a new fund operated by students at the Ross School of Business at the University of Michigan, announced its first investment this morning — in LearnZillion, a Washington, D.C.-based company that offers online video lessons for students in grades three through nine from top teachers around the country.
The Social Venture Fund makes early-stage investments of up to $200,000 in for-profit companies that have a social impact. The fund joined a syndicate of 17 investors from around the country in a $2.4 million round.
The fund is managed by Gautam Kaul,a professor of finance at UM, and 34 business school students.
UM now has three student-managed funds. The first, the Wolverine Venture Fund, co-invests in early-stage companies with established venture firms around the country. The Frankel Commercialization Fund does seed-stage investing in companies not ready for venture capital.
The Samuel Zell & Robert H. Lurie Institute for Entrepreneurial Studies at the University of Michigan’s Stephen M. Ross School of Business today announced its Social Venture Fund has closed its first investment. The Fund joined a syndicate of 17 investors in a Series A round investment totaling $2.4 million in LearnZillion, a web-based platform that gives students, teachers and parents access to a video library of high-quality, standards-based lessons taught by the nation’s top teachers. This marks the Social Venture Fund’s first investment and the first ever investment made by a socially-oriented student-led venture fund.
The Social Venture Fund’s seeks to make early-stage investments of up to $200,000 in sustainable, innovative, for-profit organizations that deliver financial returns and place the generation of a significant social impact at the heart of their mission. It is managed by Gautam Kaul, Professor of Finance at the Ross School of Business and by 34 students (29 MBAs and 5 BBAs) who have wide-ranging experience in fields that include technology, investment and education. Along with the Wolverine Venture Fund and Frankel Commercialization Fund, the Social Venture Fund completes U-M’s trifecta of student-led venture funds, managed by the Zell Lurie Institute, which effectively immerses students in experiencing all aspects of venture capital investing.
“This investment marks an important milestone in the history of the Social Venture Fund,” said Seth Greenberg, MBA ’12 and one of the directors of the Social Venture Fund. “We are not only making our first financial investment, but are also co-investing with well-established impact investors and venture capitalists on the deal to help LearnZillion develop and scale their business. This is more than just an investment; it is an incredibly valuable learning experience for students involved. We hope we can act as a model that other business schools can replicate as a way for students to learn first-hand about early stage investing in socially and environmentally responsible companies.”
A team of nine students led by Emily Airey MBA ’12 and Daniel Reyes MBA ’12, consisting of business and law students, sourced the deal and conducted in-depth due diligence on the company, which proved valuable to several of the deal’s investors. As part of the Social Venture Fund’s investment in LearnZillion, both parties will work together to ensure socially-minded business metrics are met on an ongoing basis. The company is also participating in the Institute’s Summer Internship program to bring an intern onboard from Ross to work with the company.
Eric Westendorf, co-founder of LearnZillion noted the enthusiasm and thoroughness demonstrated by the students from the Social Venture Fund was impressive. They were extremely thorough in their due diligence and both the information and excitement they shared proved extremely valuable in helping to get other investors on board. He feels the Social Venture Fund has and will continue to play an important role as the company tries to create positive change in today’s education system.
LearnZillion currently focuses its lessons on grades three through nine with a focus on math. This funding will help the company accelerate content development by bringing on additional staff and developing additional material. Other investors include O’Reilly Alpha Tech Ventures, DC Community Ventures and Learn Capital Venture Partners.
“We charted the course when we introduced the Wolverine Venture Fund as the first student-led fund, and we have blazed the trail yet again by having our Social Venture Fund be the first socially-oriented student-led fund to close a deal,” said Tom Kinnear, executive director of the Zell Lurie Institute. “Our funds have performed above average with several successful exits through the years and have provided many students with an unparalleled learning experience. With today’s investment in LearnZillion, we can proudly add social outcomes to the positive benefits generated by this program.”
About the Samuel Zell & Robert H. Lurie Institute for Entrepreneurial Studies
The Institute and its Center for Venture Capital and Private Equity Finance bring together a potent mix of knowledge, experience and opportunities from the front lines of entrepreneurship and alternative investments. The student learning experience is further enhanced through internships, entrepreneurial clubs and events that serve to provide viable networks and engage the business community. The School’s three student-led investment funds, with over $6.5M under management, immerse students in the business assessment and investment process. Founding Board Members include Samuel Zell, Chairman of Equity Group Investments and Eugene Applebaum, Founder of Arbor Drugs, Inc. For more information, visit the Institute atwww.zli.bus.umich.edu.
At the Zell Lurie Institute we embrace the School’s drive in fostering action based learning initiatives and encouraging our students to take the lead in co-creating these initiatives. We are proud of the success of our student-led Wolverine Venture and Frankel Commercialization Funds; and now have another fund to add to their ranks – the Social Venture Fund. This newly minted fund will give students the chance to combine the business side of making money with doing ‘good’ for society.
Created in 2009, the student-led Fund is seeking to make its first investment in spring 2011. It will provide early-stage investments of up to $200,000 to organizations in the Michigan area that can deliver a “double bottom line” return in six key areas: education, environment, finance, food and nutrition, health, and urban revitalization. The Fund’s unique vision is to transform the way business is done by training the next generation of socially-minded business leaders to invest in and manage for-profit companies that work towards making a difference in society.
In addition to their involvement in the Fund, students are required to take courses in social valuation to better equip them to make investment decisions in this burgeoning field.
The Social Venture Fund is the first of its kind in the nation. Read more about it. See: http://www.zli.bus.umich.edu/wvf/svf_overview.asp
Welcome to the blog for the Zell Lurie Institute for Entrepreneurial Studies at the University of Michigan. Entrepreneurs Notebook will offer perspective on issues facing today’s entrepreneurs, new developments at the Institute, and the accomplishments of University of Michigan students and its entrepreneurial graduates. We will also include highlights from our robust portfolio of experiential learning programs including the campus-wide Michigan Business Challenge competition, Dare to Dream Grants for student start-ups, Tech Arb Accelerator and three student-led venture funds – the Wolverine Venture, Frankel Commercialization and Social Venture Funds.
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