Emory University’s student venture fund raises a new generation of investors – TechCrunch

Last year a small A group of Emory University graduate students at Goizueta Business School in Georgia have begun to examine the challenge of gaining access to capital from black founders and other historically underrepresented founders. One way to do this, they felt, was to nurture a generation of investors who would pay more attention to these groups.

The idea turned into an investment fund called Peachtree Minority Venture Capital Fund, with the goal of teaching students about venture capital while investing in real companies with minority founders. The fund just completed its first group of investments when the idea came to life in the classroom.

Humza Mirza and four other student managing partners – Alexia Brown, Jack Semrau, Dylan Cowley and Miguel Vergara (pictured above) – worked with the inaugural class around the fund’s initial investments while learning how to become a venture capitalist.

“We are a fully operational fund. We have a cohort of 24 students doing due diligence on our investment pipeline. And we’re just keeping that kind of ball rolling and growing,” Mirza said.

These lessons and activities led to the first three companies receiving funding from this year’s group. Among the fund’s early investments were $25,000 for CommunityXan app for organizing around specific causes, including creating calls to action, events, and petitions.

The company donated an additional $15,000 each to ecotone renewable energya startup producing liquid plant fertilizer from food waste, and FundStorywhich provides a non-dilutive capital access and management platform.

All three startups meet the fund’s criteria of having a diverse founding team with a great idea struggling to raise capital.

A student in the program, Bonnie E. Schipper, said she observed a steeper path for underrepresented founders and recognized how the fund was trying to address this issue.

“Our team has made it a priority to look beyond a lack of fundraising history or a high-level degree to truly assess the founders’ experience, passion, knowledge and value proposition. to ensure that we present the best investment opportunities rather than falling prey to historical practices that provide unfair benefits to the most privileged populations,” she said.

Another student, Ardalan Javadi, said he was attracted to this program because he wanted to pursue a career in early stage venture capital. “My team focuses on commercial and financial services; we went through all the screening, sourcing and due diligence of investment opportunities with minority startup founders,” he said.

“We sourced more than 55 startups and recommended one startup to the investment committee. I think that’s unique about the Peachtree Minority Venture Fund. You have the opportunity to honestly learn all aspects of venture capital funds that focus on minority founders and make a real impact by investing in this opportunity.

While the students manage the fund, it is up to the professors responsible for the theoretical part to prepare them and help them understand what investing in companies entails.

Professor Robert Kazanjian, who is teaching the in-class component this semester, said the focus is on understanding the nature of investing in historically underrepresented groups, as well as the challenges they face to to collect funds.

For starters, he said people in the fund’s target groups often don’t have access to capital from family and friends, which he explained is “due to decades of inequality.” structural economics, the structure of venture capital networks (which are largely male and white), as well as a range of implicit biases observable in venture capital investing due to a range of psychological factors.

“We explicitly discuss in class that this is changing and that many venture capitalists are working diligently to address these imbalances, but the underfunding has proven to be persistent,” he said.

Additionally, he said he teaches an in-depth understanding of the full range of activities required by venture capital professionals, such as deal sourcing, due diligence, legal considerations and direct data collection from companies, including interviews with the founders.

The project was the brainchild of four students who started it but graduated before welcoming its first class. One of those original students, Willie Sullivan, told TechCrunch last year that they wanted to solve an ingrained problem about investing in black-owned businesses.

“When we conducted interviews, one of the main things that came out, which always comes up, is the extent of the problem of access to capital for black entrepreneurs. And so we were in the process of formulating our recommendations. It was really, ‘OK, how can we as a university fix this,'” Sullivan said at the time.

The fund received $1 million from the school’s endowment last year. Mirza was part of the group of freshmen involved in the founding team that took over when the founding group graduated. “Willie and the second years conceptualized the fund. They put together the skeleton, all the documents, all the paperwork, the investment vehicles, while working with the dean to get this million dollar funding,” Mirza said.

Additionally, the program is designed to continue each year by preparing a group of incoming managing partners who will take over when the previous group graduates, just as Mirza and his team succeeded Sullivan and theirs.

The course and associated fund aims to raise awareness and solve a real access problem that exists for underrepresented founders while creating a new generation of investors who are trained to look at people with good ideas who have traditionally been left behind by risky investing.

Robert D. Coleman