By Cheryl Conner
January 19, 2013
The University Venture Fund is the world's largest independently managed fund run entirely by students.
The University Venture Fund is the world’s largest independently managed fund run entirely by university students.
UVF hosts an annualUniversity Private Equity Summit, where top VCs and investment experts offer best practices and wisdom to approximately 300 attendees. It’s not too late to attend this year’s Summit in Salt Lake Cityand Park City, January 24-26. David Hornick ofAugust Capital and Jeremy Andrus of SkullCandy head this year’s keynote list. Panelists include Matt Miller of Sequoia Capital, David McClure of500 Startups, Ray Bradford, from Kleiner Perkins, Stacy Bishop, Scale Venture Partners, Randal Quarles from Carlyle and many others. Entrepreneurs and press will also get into the act, with Ryan Lawler of TechCrunch,Peter Yared, the CTO of CBS Interactive, andForbes’ own Amy Rees Anderson, the former CEO of MediConnect who’s now launched her own investment and mentoring company REES Capital.
For more information about the Summit, visitwww.uventurefund.com.
So the UVF is truly run entirely by students? The fund currently does have two full time staff: Managing Director, Tom Stringham, and Peter Harris, the fund’s Principal. The investment team includes Sr. Associates, Associates, and interns, according to Olsen, who has been with the fund since last May and is currently an associate. A newly graduated student of the U of U’s law school, he considers the opportunity to participate in UVF to be a hugely beneficial experience—so much so that 300 applicants applied for just a handful of openings when he was selected for his own position in May.
UVF's 2013 Utah Private Equity Summit is January 24-26 in Salt Lake City and Park City
“Rarely do you see a fund or an opportunity like this where the students actually raise the funds and answer to limited partners for the returns they achieve,” he said. “It gives us a huge amount of experience when we are actually speaking to the VCs and to the CEOs, and we’re vetting these deals. We’re providing analysis—working through the financials—and we present our results to other students, who vote on whether we should invest in a given company or not.”
“We often speak to the CEOs directly and are helping to push an actual deal forward. It gives us experience we wouldn’t get through any other program at a university level,” Olsen said.
UVF doesn’t invest independently in the deals it selects, Olsen explains. Part of the learning experience comes from the opportunity to perform due diligence and make investments alongside funds such as Draper Fisher Jurvetson, Kleiner Perkins Caufield & Byers, Benchmark Capital, Battery Ventures, Hummer Winblad Venture Partners, Opus Capital, and Best-Buy Capital. Morgan Stanley and UBS are involved in the program as investors as well.
Deals include start-up ventures and technology firms from throughout the U.S. According to CrunchBase, UVF funded one deal in 2012: AtTask, a Utah provider of project and workflow management, in October.
Shawn Olsen, a new graduate of the U of U Law School program, is a student Associate for UVF
What did Olsen gain personally from the experience of working with UVF? “I gained a whole new confidence level,” he said. “I’ve always thought it would be the coolest thing ever to be a part of a start up—but before this, I never felt it was something I could actually do.”
“Being so much a part of these deals—and the fact that they’re real—we see the customer feedback, the financials—you become really passionate about the process. You become part of the company itself, in essence.”
Are there other similar university programs? Apparently there are quite a few evergreen funds (students participate, but returns remain in the fund for use in future investments), but there are less than a handful of true student-run investment funds participating in full-on deals that are responsible for producing returns for the limited partners.
The UVF traces its roots to venture capitalist Geoff Woolley, who earned his M.B.A. from Utah’s David Eccles School of Business and later foundedDominion Ventures. Woolley suggested the students start their own venture fund. Several students began raising the seed money, and the UVF program was born. The effort got another big boost in 2001 in the form of a $500,000 commitment from James Lee Sorenson of The Sorenson Companies and a University of Utah alum. Sorenson challenged the students to raise money from institutional investors instead of relying on charitable donations. The Fund closed $5M in 2004 from investors that included UBS and Tim Draper. By 2006, the Fund had reached the $18.2M in assets that made it the largest student-run fund (by assets under management) in the world.
Students, investors and prospective investments from anywhere in the U.S. can participate in the Summit, despite the program’s U of U roots. So if you’d like to participate—perhaps learn some more about the program by attending the January Summit and getting in a bit of skiing or a visit to the Sundance Film Festival on the side—here’s your opportunity.
And to the directors, the limited partners and the associates of UVF – well done! As for my nephew, Shawn, something makes me suspect his career after passing the Utah State Bar will likely involve startup companies and entrepreneurs. We shall see.