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Social Impact Venture Funds On The Rise On MBA Campuses

From Europe to the US, student-led VC funds are all the rage. But what are MBA students set to learn if they take the plunge?

Thu Sep 20 2018

BusinessBecause
Stuart Minnaar and Andrew Wong are driven by a common goal: to use their social impact venture to drive the social change conversation in the MBA classroom, and build the infrastructure for business to enact positive social development.

Together they launched Fundie Ventures, one of Europe’s first student-led social impact venture funds, after meeting at IE Business School. Stuart was an MBA student, Andrew a US MBA grad studying for a Master’s in Advanced Finance.

They are currently acting as a new venture consultancy while they raise their own fund, alongside work to set up funds at other schools in Europe—they work closely with IESE, in Spain, and Ecole des Ponts, in France.

“We offer them what we’ve built in the past years,” Stuart explains. “We label it for different business schools so all they have to do is plug in the students and go.”

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Their plan, they say, is to branch out to the top 10 business schools in Europe over the next year and a half. They offer those schools the same consultancy expertise they’ve developed with Fundie Ventures.

“First, we do investment readiness, so if we find a company that is ready for investment we will source funding for them,” Andrew says, “and then the other value is if we find there are gaps within the startup—whether financial valuation, or strategy consulting—that’s something that we offer them as well.”

The idea was driven by a sense of responsibility, says Stuart. There he was, at IE Business School, with an opportunity to do something about the way business is perceived in the 21st century.

“Before I studied I wanted to change the shift in the way we do things,” he explains. “Business, people, and planet should be in harmony. I wanted to set something up that has a legacy beyond us when we’re not students.”

That conversation needs to be a vital part of all MBA classrooms, but Fundie Ventures have their work cut out in Europe to catch up with impact investing levels across the Atlantic.

“60% of capital deployed comes from the US, or originates from the US,” Andrew explains. “That’s echoed in the amount of activity at business schools in the States. I think it’s a good indicator of how far along they are.”

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Fundie Ventures, he hopes, is the model that will help further establish the ecosystem in Europe. There may even be scope to develop the idea in the US.

In the US, Andrew says, he sees a lot of traditional VC funds and wealth management firms, and within that area there’s a sub section made up of a small group of student-led VC impact funds. Their idea seems to have hit upon a niche in the market, though.

“You don’t see much in terms of consulting and capacity building,” he adds. Fundie Ventures’ working thesis is to divide between finding good startups and vetting them—that’s where the gap in the market is, says Andrew.


The University of Michigan’s Ross School of Business launched its first student-led VC fund out of its Zell Lurie Institute (ZLI) more than 20 years ago.

The Wolverine Fund—launched in 1997 with the aid of an anonymous $2 million donation—kicked off Michigan Ross’s commitment to teaching students how to invest.

Working with local VCs students quickly learned the ins and outs of the local investment world, before the fund incorporated a for-credit course into the MBA curriculum.

“The local investment community on the board found a lot of benefit from the due diligence done by the students,” says Stewart Thornhill, executive director of the Zell Lurie Institute. “They would bring things to the table VCs might not have had time to uncover.”

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Ten years later, the Frankel Fund—now the Zell Lurie Commercialization Fund—launched, which focuses on early stage companies. Alongside that, now in its seventh year, the Social Venture Fund focuses on anything between angel and VC investment, and exclusively focuses on socially driven for-profit businesses.

The Zell Lurie Institute continued to grow with the Zell Early Stage Fund—run by undergrads and focusing on late stage angel, and early stage VC investing.

The most recent addition, says Stewart, is the Founders Fund. It recruits one student from each of the other funds and invests in companies led by recent graduates of Michigan Ross. It’s also the only fund that doesn’t offer course credit. 

Impact investing is popular, explains Stewart, with between 120-and-150 students across the four for-credit funds.

The most difficult thing for them to learn, he says, is the slow process of investing—what can often feel like a very slow jaunt to progress. But, those that persist are set to learn a plethora of skills that will serve them well in the wider world.

“When a group of students goes and does due diligence on competition, they will often come back with things the entrepreneur might not have come back with,” says Stewart.

“If they become entrepreneurs [themselves] and have to find their own financing, they’re not going to be walking in like lambs to the slaughter. They will know what a good investment pitch looks like.”

Wiles Kase is one such MBA student who found himself venturing into the Zell Lurie Institute. He entered with no investment experience, and after six months became the director of operations for the Social Venture Fund.

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“That’s when I really started to sink my teeth into the nitty gritty of the deals we were doing,” he says, “and I learned so much about structuring deals, and gaining access to capital.”

Wiles echoes Stewart’s point that MBA students come out of the funds with an exceptionally well-polished skillset in due diligence.

“It’s not something you can really access through coursework,” he adds. “You go through the process five or 10 times before meeting the venture capitalist for the first time.”

He says it made him ponder why doctors are so “awesome”—so focused and prepared. “It’s because starting in their second year of med school they are working in the hospital, accumulating real life experience, making decisions, and caring for patients,” he says.

“Other disciplines lack that level of consistent, long-term practice, [but] the ZLI’s funds provide exposure to real decisions, risks, and outcomes in an investment setting so that students leave the program ready to lead and make decisions on issues of consequence.”

Julia Enyart, an MBA graduate from Wharton, had a similar experience at Wharton Impact Investing Partners, the school’s student-led impact investing program.

She says that the key benefit for her was a thorough understanding of the investment cycle from start to finish.

It’s exposure to the way venture capitalists think, she adds. “An Investment Committee (IC) will expect you to know the business model of the startup you’re pitching backwards and forwards, and to have spoken to actual consumers who have used and (hopefully) liked the product.”

Julia says that you are fully schooled in the negotiation skills needed to convince an Investing Committee. She adds that you begin to understand that investing requires real traction and a viable, profitable business model—invaluable knowledge to any keen entrepreneurs.

julia-wharton-mba

The most important piece of knowledge she acquired though, was that you’re not a cheerleader when you’re pitching to the Investment Committee.

“Adopting a skeptical tone versus an enthusiastic one is much more convincing,” she says. “Remaining fact-based, thoughtful, and anticipating the IC’s concerns shows you’ve deeply thought through the risks of the investment, and that you’re not so married to the company that you’re blinded by its weaknesses.”

As someone who used to work in international development, Julia is excited by the opportunities on offer for social ventures to drive meaningful, social development around the world.

“I have only worked in jobs where I’m part of something bigger than myself. I see impact investing as an absolutely crucial tool in an era where dwindling foreign aid and weak government leadership will prevent us from [tackling] widening global disparities.”

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Madrid Is incredible, I've had a fantastic time at IE University. I've had some excellent lecturers overall. They sincerely want the students to flourish and are concerned about developing a personal relationship with them. Having said that, students typically must fulfil their half of the contract by putting in the necessary work and demonstrating a desire to achieve success.

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IE university has a global perspective and attracts a highly diverse student body, with students from all over the world. This international environment fosters cross-cultural understanding and prepares students to work in a globalized world. This is same for the faculty members as well, the university's faculty members are from diverse parts of the world and are reputable. they are not only experts in their fields but are also often actively engaged in research and industry. Their practical experience and academic expertise create a stimulating learning environment.

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31/10/2023

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IE University, in my experience as a student, stands out as an outstanding institution for higher education. Its international perspective is a major strength, evident in the diverse student body that represents a multitude of countries and cultures. Interacting with such a global community has broadened my horizons and deepened my understanding of various subjects, providing a rich and comprehensive educational experience. The quality of the faculty at IE University is exceptional. Many professors bring real-world experience to the classroom, making the learning process more practical and relevant. This approach not only enhances engagement with coursework but also ensures that students are well-prepared for their future careers. The accessibility of professors and their willingness to engage with students personally fosters a collaborative and supportive learning environment. Practical learning is another significant advantage at IE University. The integration of real-world projects, internships, and case studies bridges the gap between theory and practice. This emphasis on hands-on experience equips students with practical skills and industry insights, making them more competitive in the job market. IE University offers a wide range of programs across various fields of study, making it a versatile choice for both undergraduate and postgraduate students. This diversity ensures that individuals can find a program that aligns with their academic and career interests. However, like any institution, IE University has its challenges. The cost of attending can be a major concern for some students, as tuition fees are relatively high. While scholarships and financial aid are available, not all students may qualify for them. This financial aspect is an important consideration, particularly for those with budget limitations. The competitive nature of some courses and programs can create a high-pressure environment. While competition can be motivating for some, it may also lead to stress for others. Maintaining high academic standards can be demanding, and students should strive for a balance between excellence and well-being. The workload can be quite challenging, especially for students undertaking double degrees or heavily involved in extracurricular activities. Effective time management is essential to manage academic demands while maintaining a healthy work-life balance. In conclusion, I would recommend IE University to prospective students with specific considerations. If you value an international perspective, practical learning, and a diverse educational environment, IE University is an excellent choice. However, it's crucial to carefully weigh the tuition costs against the benefits and to be prepared for the competitive nature of some courses. Students should also be ready to handle a demanding workload. IE University has provided me with a rich and globally-focused education, equipping me for a career in an interconnected world. Ultimately, it's important to make an informed decision based on your educational and financial goals, along with a willingness to confront the challenges that may arise.

Jose

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26/10/2023

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Rather Exciting

As a student at IE University, enrolled in the Business Administration program, I can confidently say that my experience at this institution has been overwhelmingly positive. IE University's innovative approach to education stands out as one of its most remarkable features. The interactive classes and focus on critical thinking, particularly through the use of case studies, have significantly enhanced my ability to apply theoretical knowledge to real-world business scenarios. Additionally, the global perspective at IE University, fostered by the diverse student body and international faculty, has broadened my understanding of global business practices, which is crucial in the field of Business Administration. The university's strong industry connections have proven to be invaluable. These connections provide students with numerous internship opportunities and networking prospects, allowing us to gain practical experience and build professional relationships while still studying. Moreover, the comprehensive career support services offered by IE University, such as resume building, interview preparation, and job placement assistance, have been instrumental in preparing us for the job market. On the flip side, it's important to mention that tuition costs at IE University can be relatively high, which may pose a financial challenge for some students, even though there are scholarships and financial aid options available. Additionally, the programs at IE University can be intensive, demanding a significant time commitment, which might not align with everyone's preferences. In conclusion, I wholeheartedly recommend IE University to individuals considering a degree in Business Administration. The innovative teaching methods, global perspective, strong industry connections, and comprehensive career support make it an excellent choice for those aspiring to enter the world of business. However, prospective students should be aware of the financial considerations and be prepared for the intensive nature of the programs. If you're willing to invest in your education and are dedicated to your studies, IE University offers an exceptional and enriching educational experience in the field of Business Administration.

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22/10/2023

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A Decent Experience

I've had the privilege of being a student at IE University, where I've been pursuing a degree in arts. My experience at IE University has been highly rewarding and unique. One of the aspects I appreciate the most is the university's strong emphasis on interdisciplinary learning. The opportunity to collaborate with students from diverse fields, including business, technology, and social sciences, has enriched my artistic endeavors. This cross-pollination of ideas has added depth and diversity to my creative work. IE University's international perspective is another significant advantage. The institution's diverse student body and faculty from various corners of the world have broadened my artistic horizons and encouraged me to think more globally. In the field of arts, where cultural influences play a pivotal role, this global outlook has been invaluable. The university also invests in modern resources and technology, providing students with access to cutting-edge software, creative tools, and state-of-the-art facilities. These resources have allowed me to explore new mediums and techniques, pushing the boundaries of my creativity. Furthermore, IE University places a strong emphasis on practical experiences. This practical orientation has given me insights into the professional art world and how to navigate it effectively. Opportunities for internships and collaborations with art institutions have been instrumental in bridging the gap between academic learning and real-world application. On the downside, tuition costs at IE University can be relatively high, which may pose a financial challenge for some prospective students. Additionally, the university's programs are quite intensive, demanding a substantial time commitment and strong time management skills. In conclusion, I would wholeheartedly recommend IE University to students seeking an arts education with an interdisciplinary and global perspective. The institution's innovative resources, practical experiences, and international approach have significantly enriched my artistic journey. Nevertheless, it's crucial to consider the financial aspect and be prepared for the demanding nature of the programs. If you're willing to invest in your arts education and are committed to hard work, IE University offers a truly unique and rewarding artistic experience.

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18/10/2023

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A Great Experience

As a student at IE University studying architecture, I have a unique perspective on the institution. Let me share my thoughts on this university: Overall, my experience at IE University has been quite positive. The university's commitment to a holistic education, combined with its innovative approach to learning, has made my time here rewarding. Here are some key aspects I appreciate: Interdisciplinary Approach: IE University places a strong emphasis on interdisciplinary learning. In the field of architecture, this means I've had the opportunity to collaborate with students from various backgrounds, such as engineering, business, and design. It's been enlightening to work on projects that integrate different disciplines, mirroring the real-world scenarios architects often find themselves in. Faculty and Industry Connections: The professors at IE University are experienced professionals in their respective fields, and they bring a wealth of practical knowledge into the classroom. This has greatly enriched my architectural education. Additionally, the university's strong connections with industry professionals and firms provide students with valuable networking opportunities and potential internships. Global Perspective: IE University's international approach to education is a significant advantage. I've had the chance to collaborate with students from all over the world, which has broadened my cultural awareness and global perspective. This is particularly important in architecture, as it's a field where global influences and trends play a significant role. Innovation and Technology: The university's commitment to staying at the forefront of technological advancements is impressive. In architecture, this means access to cutting-edge software, tools, and resources, which have been instrumental in my academic and design work. On the flip side, there are a few aspects that might not suit everyone: Tuition Costs: IE University is a private institution, and as such, tuition can be on the higher side. This might be a challenge for some students, but there are scholarship opportunities and financial aid options available. Intensive Programs: The university's programs are often quite intensive, requiring a significant time commitment. While this can be beneficial for learning, it can also be demanding, so time management skills are crucial. In conclusion, I would certainly recommend IE University to those interested in studying architecture. Its unique approach to education, international perspective, and strong industry connections have enriched my architectural journey. Just keep in mind the financial considerations and be prepared to put in the effort, and you'll find a stimulating and rewarding academic experience at IE University.

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16/09/2023

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A Global and Innovative Learning Experience

IE University is a dynamic and innovative institution that has gained recognition for its unique approach to education. There are several aspects that make it stand out, and while it may not be the perfect fit for everyone, it certainly has a lot to offer. One of the notable strengths of IE University is its commitment to fostering a global perspective. The university attracts a diverse student body from all over the world, creating a rich multicultural environment. This diversity enriches the classroom experience and prepares students to thrive in an increasingly interconnected world. The emphasis on international exposure through study abroad programs, exchange partnerships, and a global network of alumni further enhances this global outlook. IE University is also known for its focus on entrepreneurship and innovation. The institution places a strong emphasis on practical, real-world learning experiences that encourage students to develop an entrepreneurial mindset. This approach aligns well with the demands of the modern job market, where creativity and adaptability are highly valued. Furthermore, IE University's faculty is often comprised of professionals with extensive industry experience, providing students with valuable insights and connections in their respective fields. The small class sizes enable more personalized attention, fostering a close-knit community and facilitating meaningful interactions between students and professors. However, no university is without its drawbacks, and IE University is no exception. One potential downside is the cost of tuition, which can be relatively high compared to some public institutions. While scholarships and financial aid options are available, this cost may still be a barrier for some prospective students. Another consideration is the intensity of the academic programs. IE University is known for its rigorous curriculum, and students often find themselves facing a demanding workload. While this can be an advantage for those who thrive in a challenging environment, it may not be suitable for individuals seeking a more relaxed college experience. In conclusion, IE University is an excellent choice for students who are looking for a globally oriented, innovative, and academically rigorous education. Its emphasis on entrepreneurship, international exposure, and practical learning experiences can prepare students for success in a competitive job market. However, the high cost of tuition and the demanding nature of the programs should be carefully considered. Ultimately, whether IE University is the right fit depends on the individual's goals and preferences, but for those who are up to the challenge, it can be a rewarding and transformative educational experience.

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9/01/2024

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