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Ross Launches Social Venture Fund

9/30/2010 --

Action-based initiative aligns with new courses to place impact investing at the forefront of entrepreneurial education.

Ann Arbor, Mich. — Marshalling an increasing student interest in the social-impact investment space, the Samuel Zell & Robert H. Lurie Institute for Entrepreneurial Studies at the Ross School of Business recently launched the Social Venture Fund (SVF). It is the third student-managed fund at Ross, which also is home to the Frankel Commercialization Fund and the Wolverine Venture Fund.

The goal of the newly formed SVF is to train students to invest in and manage sustainable, for-profit enterprises that respond to societal needs that would otherwise not be met as effectively or at all by other market players.

"Leveraging the breadth and depth of the University's research and resources, the Social Venture Fund will provide a new breed of forward-thinking companies with the strategic capital they need to change the world," says Gautam Kaul, the John C. and Sally S. Morley Professor of Finance and managing director of the fund. "The business world needs intelligent leaders who can do good for society in a financially disciplined and rewarding way."

The SVF will make early-stage investments of up to $200,000 in for-profit organizations that can deliver "double-bottom-line" returns in six key areas: education, environment, finance, food and nutrition, health, and urban revitalization. Up to 30 students will serve on the fund and manage its activities, including deal sourcing, due diligence, and marketing support. They are expected to make their first investment in spring 2011 and are focusing on entities in Detroit and Southeast Michigan.

"The Social Venture Fund is a natural extension of what we've been doing here for over a decade," says Tom Kinnear, executive director of the Zell Lurie Institute. "Combining rigorous and tangible venture capital experience with the more intangible, but critically important, social valuation experiences distinguishes us from our peers in entrepreneurial education. We proudly dare students to apply the power of their entrepreneurial spirits in unique ways and students have risen to the challenge with the pursuit of this fund and its forward-looking vision."

In line with ZLI's standing as an innovator in entrepreneurial education, students in the SVF are required to undertake rigorous coursework that provides them with the education and tools essential to evaluating and financing venture investments in this burgeoning field. The new Impact Investing course will cover issues ranging from financial and social valuation to internal performance measurement and term sheets. Students also will be challenged to explore best practices for measuring the real social impact of a business and establish criteria for the Fund's own investments. "With leadership comes the responsibility to educate shareholders and the public at large about the complex nature of the interactions between the firm and society," says Kaul. "While providing students with invaluable real-world experience, the Social Venture Fund will expose students to coursework that underscores the value firms can truly provide to society at large and for the real long run."

The school's pioneering Wolverine Venture Fund was the country's first student led venture fund and has realized four successful exits, including the only IPO by a student-led fund with Intralase in 2004. The Social Venture Fund takes this to the next level by incorporating social valuation into students' assessments of potential investments. In an extraordinary show of support, the graduating MBA Class of 2010 pledged its class gift to support the new fund.



For more information, contact:
Mary Nickson, (734) 615-4424, mnickson@umich.edu