innovation, funds, startups
University of Michigan Social Venture Fund Comes Out of Stealth, Aims to Invest in Companies at the Nexus of Public and Private
Erin Kutz 9/27/10
“Social shouldn’t be viewed as soft,” says University of Michigan finance professor Gautam Kaul. “Unfortunately, soft and social tend to go together in people’s perceptions.”
But Social Venture Fund, a new investing vehicle out of the University of Michigan that came out of stealth mode just last week, is taking a hard look at social inequality—and is out to prove that investments targeted at ameliorating it can make money. “We want to use rigor in measuring social impact and making investments that are real,” says Kaul, the managing director of the fund.
A handful of students approached him a year and a half ago with the idea for a social venture fund, as a new business model to help solve real-world problems, he says. He made the team formally pitch the idea to him (much in the same fashion entrepreneurs present to investors), to prove the concept went beyond a philanthropic idea, and had the potential to also generate returns.
Social Venture Fund’s team, which is now expanding and could reach a total of 30 students, has been working over the past year to develop the vision for the project and the types of companies it will invest in, Kaul says. The fund adds to the university’s group of student-run funds—the Frankel Commercialization Fund and Wolverine Venture Fund, which has had four successful exits, including an IPO. Unlike the other student-run funds at the university, Social Venture Fund didn’t start with money, Kaul says. “We felt that this was too important to wait on trying to raise money for something.” The 2010 MBA class at the school has already pledged its gift to the Social Venture Fund, which is also working on a big fundraising push.
Broadly, Kaul’s team envisions its investments falling into a handful of sectors: education, food and nutrition, health, finance, the environment, and urban revitalization. He says the team is particularly interested in looking at companies that fuse the latter two concepts, and work on solving problems that are often left to the government.
“We want to create a new type of organization that does not worry only about money making, but worries about policy and impact on society,” he continues. To do that, Social Venture Fund is looking at companies that …Next Page »
Erin Kutz is an Assistant Editor for Xconomy. You can reach her by e-mail at ekutz@xconomy.com or by phone at (617) 252-0700.
I wrote about two startups today that raised angel-sized financing rounds of around $1 million each: Hipmunk and Alphonso Labs. What caught my eye about both deals is this – neither had involvement from the so called “super angels” (except Hipmunk, which took an investment from SV Angel).
Hipmunk raised from traditional individual investors. Alphonso Labs raised money from venture capitalists.
Super Angels are investors who previously invested only their own money but at some point raised small funds and started investing third party money. That makes them indistinguishable from traditional venture funds in most respects.
Unlike angel investors, super angels have limited partners to answer to. And if returns aren’t competitive, those limited partners go elsewhere. Which is why we’re seeing so much stress emerge in the sector. Competition is fierce, and valuations are rising.
In fact, valuations are rising so quickly that a crucial psychological milestone has been reached – the $4 million pre money valuaiton. That was the primary reason that led to the formation of the AngelGate group, say multiple sources who attended those meetings.
For the first time this year the valuation on early stage deals started to average more than $4 million, say our sources. And that is the threshold where super angels’ valuation models start to break.
In a typical super angel round a company will raise $1 million on, say, a $4 million pre-money valuation. That gives investors 20% of the company, which is worth $5 million after the transaction is closed (the $4 million valuation plus the $1 million they just received)
Unlike old school venture capitalists, super angels are only counting on small exits of $15 million – $30 million. They need 7/10 or more of their companies to have these small exits to make any money. Any less and they won’t be able to raise new funds. Traditional VCs only count on 3-4 deals even returning capital. The rest are losses. But at least one of those ten deals is a huge home run, returning 10x the initial investment. Or more.
But with valuations rising, say investors we’ve spoken with, even 7 or 8 “wins” out of 10 won’t be enough to sustain the funds, given how small the acquisitions are. So exit valuations must increase, which is unlikely given the small number of buyers competing for deals, or valuations need to decline.
Some investors are just paying the higher valuations – Dave McClure is a notable example. Others are sitting on the sidelines and not investing much.
But all are griping.
The rising popularity of convertible notes, which are actually debt rounds that convert to equity later on, is increasing stress on the system. In some cases there aren’t any price protections for investors in those deals at all.
What happens next? Some of the super angel funds need to disappear, say Silicon Valley insiders. And maybe that’s for the best. The ones that are left standing will have an easier time making money down the road.
eric seiger
The Week Ahead in Health Care <b>News</b> - NYTimes.com
Politicians are campaigning on their health care votes. The Brookings Institution is holding a public forum on ensuring patient access to effective information about prescription medicines.
Call of Duty DS dev "down but not out" DS <b>News</b> - Page 1 <b>...</b>
Read our DS news of Call of Duty DS dev. ... Latest News. Treyarch supports Medal of Honor team . Chrysler issues Call of Duty Jeep . Activision has no plans for online fees . Release Date 9/11/2010; More on Call of Duty: ...
Probably Bad <b>News</b>: Transformer FAIL - Epic Fail Funny Videos and <b>...</b>
epic fail photos - Probably Bad News: Transformer FAIL.
eric seiger
innovation, funds, startups
University of Michigan Social Venture Fund Comes Out of Stealth, Aims to Invest in Companies at the Nexus of Public and Private
Erin Kutz 9/27/10
“Social shouldn’t be viewed as soft,” says University of Michigan finance professor Gautam Kaul. “Unfortunately, soft and social tend to go together in people’s perceptions.”
But Social Venture Fund, a new investing vehicle out of the University of Michigan that came out of stealth mode just last week, is taking a hard look at social inequality—and is out to prove that investments targeted at ameliorating it can make money. “We want to use rigor in measuring social impact and making investments that are real,” says Kaul, the managing director of the fund.
A handful of students approached him a year and a half ago with the idea for a social venture fund, as a new business model to help solve real-world problems, he says. He made the team formally pitch the idea to him (much in the same fashion entrepreneurs present to investors), to prove the concept went beyond a philanthropic idea, and had the potential to also generate returns.
Social Venture Fund’s team, which is now expanding and could reach a total of 30 students, has been working over the past year to develop the vision for the project and the types of companies it will invest in, Kaul says. The fund adds to the university’s group of student-run funds—the Frankel Commercialization Fund and Wolverine Venture Fund, which has had four successful exits, including an IPO. Unlike the other student-run funds at the university, Social Venture Fund didn’t start with money, Kaul says. “We felt that this was too important to wait on trying to raise money for something.” The 2010 MBA class at the school has already pledged its gift to the Social Venture Fund, which is also working on a big fundraising push.
Broadly, Kaul’s team envisions its investments falling into a handful of sectors: education, food and nutrition, health, finance, the environment, and urban revitalization. He says the team is particularly interested in looking at companies that fuse the latter two concepts, and work on solving problems that are often left to the government.
“We want to create a new type of organization that does not worry only about money making, but worries about policy and impact on society,” he continues. To do that, Social Venture Fund is looking at companies that …Next Page »
Erin Kutz is an Assistant Editor for Xconomy. You can reach her by e-mail at ekutz@xconomy.com or by phone at (617) 252-0700.
I wrote about two startups today that raised angel-sized financing rounds of around $1 million each: Hipmunk and Alphonso Labs. What caught my eye about both deals is this – neither had involvement from the so called “super angels” (except Hipmunk, which took an investment from SV Angel).
Hipmunk raised from traditional individual investors. Alphonso Labs raised money from venture capitalists.
Super Angels are investors who previously invested only their own money but at some point raised small funds and started investing third party money. That makes them indistinguishable from traditional venture funds in most respects.
Unlike angel investors, super angels have limited partners to answer to. And if returns aren’t competitive, those limited partners go elsewhere. Which is why we’re seeing so much stress emerge in the sector. Competition is fierce, and valuations are rising.
In fact, valuations are rising so quickly that a crucial psychological milestone has been reached – the $4 million pre money valuaiton. That was the primary reason that led to the formation of the AngelGate group, say multiple sources who attended those meetings.
For the first time this year the valuation on early stage deals started to average more than $4 million, say our sources. And that is the threshold where super angels’ valuation models start to break.
In a typical super angel round a company will raise $1 million on, say, a $4 million pre-money valuation. That gives investors 20% of the company, which is worth $5 million after the transaction is closed (the $4 million valuation plus the $1 million they just received)
Unlike old school venture capitalists, super angels are only counting on small exits of $15 million – $30 million. They need 7/10 or more of their companies to have these small exits to make any money. Any less and they won’t be able to raise new funds. Traditional VCs only count on 3-4 deals even returning capital. The rest are losses. But at least one of those ten deals is a huge home run, returning 10x the initial investment. Or more.
But with valuations rising, say investors we’ve spoken with, even 7 or 8 “wins” out of 10 won’t be enough to sustain the funds, given how small the acquisitions are. So exit valuations must increase, which is unlikely given the small number of buyers competing for deals, or valuations need to decline.
Some investors are just paying the higher valuations – Dave McClure is a notable example. Others are sitting on the sidelines and not investing much.
But all are griping.
The rising popularity of convertible notes, which are actually debt rounds that convert to equity later on, is increasing stress on the system. In some cases there aren’t any price protections for investors in those deals at all.
What happens next? Some of the super angel funds need to disappear, say Silicon Valley insiders. And maybe that’s for the best. The ones that are left standing will have an easier time making money down the road.
eric seiger
The Week Ahead in Health Care <b>News</b> - NYTimes.com
Politicians are campaigning on their health care votes. The Brookings Institution is holding a public forum on ensuring patient access to effective information about prescription medicines.
Call of Duty DS dev "down but not out" DS <b>News</b> - Page 1 <b>...</b>
Read our DS news of Call of Duty DS dev. ... Latest News. Treyarch supports Medal of Honor team . Chrysler issues Call of Duty Jeep . Activision has no plans for online fees . Release Date 9/11/2010; More on Call of Duty: ...
Probably Bad <b>News</b>: Transformer FAIL - Epic Fail Funny Videos and <b>...</b>
epic fail photos - Probably Bad News: Transformer FAIL.
eric seiger
eric seiger
eric seiger
The Week Ahead in Health Care <b>News</b> - NYTimes.com
Politicians are campaigning on their health care votes. The Brookings Institution is holding a public forum on ensuring patient access to effective information about prescription medicines.
Call of Duty DS dev "down but not out" DS <b>News</b> - Page 1 <b>...</b>
Read our DS news of Call of Duty DS dev. ... Latest News. Treyarch supports Medal of Honor team . Chrysler issues Call of Duty Jeep . Activision has no plans for online fees . Release Date 9/11/2010; More on Call of Duty: ...
Probably Bad <b>News</b>: Transformer FAIL - Epic Fail Funny Videos and <b>...</b>
epic fail photos - Probably Bad News: Transformer FAIL.
eric seiger
innovation, funds, startups
University of Michigan Social Venture Fund Comes Out of Stealth, Aims to Invest in Companies at the Nexus of Public and Private
Erin Kutz 9/27/10
“Social shouldn’t be viewed as soft,” says University of Michigan finance professor Gautam Kaul. “Unfortunately, soft and social tend to go together in people’s perceptions.”
But Social Venture Fund, a new investing vehicle out of the University of Michigan that came out of stealth mode just last week, is taking a hard look at social inequality—and is out to prove that investments targeted at ameliorating it can make money. “We want to use rigor in measuring social impact and making investments that are real,” says Kaul, the managing director of the fund.
A handful of students approached him a year and a half ago with the idea for a social venture fund, as a new business model to help solve real-world problems, he says. He made the team formally pitch the idea to him (much in the same fashion entrepreneurs present to investors), to prove the concept went beyond a philanthropic idea, and had the potential to also generate returns.
Social Venture Fund’s team, which is now expanding and could reach a total of 30 students, has been working over the past year to develop the vision for the project and the types of companies it will invest in, Kaul says. The fund adds to the university’s group of student-run funds—the Frankel Commercialization Fund and Wolverine Venture Fund, which has had four successful exits, including an IPO. Unlike the other student-run funds at the university, Social Venture Fund didn’t start with money, Kaul says. “We felt that this was too important to wait on trying to raise money for something.” The 2010 MBA class at the school has already pledged its gift to the Social Venture Fund, which is also working on a big fundraising push.
Broadly, Kaul’s team envisions its investments falling into a handful of sectors: education, food and nutrition, health, finance, the environment, and urban revitalization. He says the team is particularly interested in looking at companies that fuse the latter two concepts, and work on solving problems that are often left to the government.
“We want to create a new type of organization that does not worry only about money making, but worries about policy and impact on society,” he continues. To do that, Social Venture Fund is looking at companies that …Next Page »
Erin Kutz is an Assistant Editor for Xconomy. You can reach her by e-mail at ekutz@xconomy.com or by phone at (617) 252-0700.
I wrote about two startups today that raised angel-sized financing rounds of around $1 million each: Hipmunk and Alphonso Labs. What caught my eye about both deals is this – neither had involvement from the so called “super angels” (except Hipmunk, which took an investment from SV Angel).
Hipmunk raised from traditional individual investors. Alphonso Labs raised money from venture capitalists.
Super Angels are investors who previously invested only their own money but at some point raised small funds and started investing third party money. That makes them indistinguishable from traditional venture funds in most respects.
Unlike angel investors, super angels have limited partners to answer to. And if returns aren’t competitive, those limited partners go elsewhere. Which is why we’re seeing so much stress emerge in the sector. Competition is fierce, and valuations are rising.
In fact, valuations are rising so quickly that a crucial psychological milestone has been reached – the $4 million pre money valuaiton. That was the primary reason that led to the formation of the AngelGate group, say multiple sources who attended those meetings.
For the first time this year the valuation on early stage deals started to average more than $4 million, say our sources. And that is the threshold where super angels’ valuation models start to break.
In a typical super angel round a company will raise $1 million on, say, a $4 million pre-money valuation. That gives investors 20% of the company, which is worth $5 million after the transaction is closed (the $4 million valuation plus the $1 million they just received)
Unlike old school venture capitalists, super angels are only counting on small exits of $15 million – $30 million. They need 7/10 or more of their companies to have these small exits to make any money. Any less and they won’t be able to raise new funds. Traditional VCs only count on 3-4 deals even returning capital. The rest are losses. But at least one of those ten deals is a huge home run, returning 10x the initial investment. Or more.
But with valuations rising, say investors we’ve spoken with, even 7 or 8 “wins” out of 10 won’t be enough to sustain the funds, given how small the acquisitions are. So exit valuations must increase, which is unlikely given the small number of buyers competing for deals, or valuations need to decline.
Some investors are just paying the higher valuations – Dave McClure is a notable example. Others are sitting on the sidelines and not investing much.
But all are griping.
The rising popularity of convertible notes, which are actually debt rounds that convert to equity later on, is increasing stress on the system. In some cases there aren’t any price protections for investors in those deals at all.
What happens next? Some of the super angel funds need to disappear, say Silicon Valley insiders. And maybe that’s for the best. The ones that are left standing will have an easier time making money down the road.
eric seiger
eric seiger
The Week Ahead in Health Care <b>News</b> - NYTimes.com
Politicians are campaigning on their health care votes. The Brookings Institution is holding a public forum on ensuring patient access to effective information about prescription medicines.
Call of Duty DS dev "down but not out" DS <b>News</b> - Page 1 <b>...</b>
Read our DS news of Call of Duty DS dev. ... Latest News. Treyarch supports Medal of Honor team . Chrysler issues Call of Duty Jeep . Activision has no plans for online fees . Release Date 9/11/2010; More on Call of Duty: ...
Probably Bad <b>News</b>: Transformer FAIL - Epic Fail Funny Videos and <b>...</b>
epic fail photos - Probably Bad News: Transformer FAIL.
eric seiger
eric seiger
The Week Ahead in Health Care <b>News</b> - NYTimes.com
Politicians are campaigning on their health care votes. The Brookings Institution is holding a public forum on ensuring patient access to effective information about prescription medicines.
Call of Duty DS dev "down but not out" DS <b>News</b> - Page 1 <b>...</b>
Read our DS news of Call of Duty DS dev. ... Latest News. Treyarch supports Medal of Honor team . Chrysler issues Call of Duty Jeep . Activision has no plans for online fees . Release Date 9/11/2010; More on Call of Duty: ...
Probably Bad <b>News</b>: Transformer FAIL - Epic Fail Funny Videos and <b>...</b>
epic fail photos - Probably Bad News: Transformer FAIL.
eric seiger
The Week Ahead in Health Care <b>News</b> - NYTimes.com
Politicians are campaigning on their health care votes. The Brookings Institution is holding a public forum on ensuring patient access to effective information about prescription medicines.
Call of Duty DS dev "down but not out" DS <b>News</b> - Page 1 <b>...</b>
Read our DS news of Call of Duty DS dev. ... Latest News. Treyarch supports Medal of Honor team . Chrysler issues Call of Duty Jeep . Activision has no plans for online fees . Release Date 9/11/2010; More on Call of Duty: ...
Probably Bad <b>News</b>: Transformer FAIL - Epic Fail Funny Videos and <b>...</b>
epic fail photos - Probably Bad News: Transformer FAIL.
eric seiger
The Week Ahead in Health Care <b>News</b> - NYTimes.com
Politicians are campaigning on their health care votes. The Brookings Institution is holding a public forum on ensuring patient access to effective information about prescription medicines.
Call of Duty DS dev "down but not out" DS <b>News</b> - Page 1 <b>...</b>
Read our DS news of Call of Duty DS dev. ... Latest News. Treyarch supports Medal of Honor team . Chrysler issues Call of Duty Jeep . Activision has no plans for online fees . Release Date 9/11/2010; More on Call of Duty: ...
Probably Bad <b>News</b>: Transformer FAIL - Epic Fail Funny Videos and <b>...</b>
epic fail photos - Probably Bad News: Transformer FAIL.
how to lose weight fast big seminar 14
big seminar 14
big seminar 14
big seminar 14
The Week Ahead in Health Care <b>News</b> - NYTimes.com
Politicians are campaigning on their health care votes. The Brookings Institution is holding a public forum on ensuring patient access to effective information about prescription medicines.
Call of Duty DS dev "down but not out" DS <b>News</b> - Page 1 <b>...</b>
Read our DS news of Call of Duty DS dev. ... Latest News. Treyarch supports Medal of Honor team . Chrysler issues Call of Duty Jeep . Activision has no plans for online fees . Release Date 9/11/2010; More on Call of Duty: ...
Probably Bad <b>News</b>: Transformer FAIL - Epic Fail Funny Videos and <b>...</b>
epic fail photos - Probably Bad News: Transformer FAIL.
big seminar 14
Making money with a blog can be easier than you think. People can make hundreds, thousands, or even tens of thousands of dollars a year with a good blog. Here are some tips for maintaining one.
First, you have to get a web host. While this is fairly obvious, it's important to note that most of the free blogging sites won't be very conducive to advertising. It's best to buy your own domain name and build your website from there. However, this is very inexpensive, especially for a blog because it doesn't require much server space. Figure around 10 dollars a month. If you have a good blog, the profit will obviously be exponentially enormous.
Figure out how to code HTML. Most of the time, blogging software will cost you money, which will inevitably decrease your profit. HTML is easier than one would think. The best thing you can do is at least give it a shot. There are plenty of manuals on HTML that you can find for free online.
Figure out a good topic. Find something that fits three criteria. First, make sure it's something you're passionate about. This will making writing for it less tedious, and because it's less tedious, you will want to do it more, thus garnering more readers. Second, find something that people want to read. If you're passionate about dissecting small animals, it's going to be hard to build a large subscriber base. Next, and perhaps most importantly if money is your goal, find something that's conducive to advertising. You want something that companies will relate to and want to post their ads for on your blog. The more relevant your ads are, the more clicks you get, and thus, the more money you get.
Once you start posting, keep posting. Even if you have a base of subscribers, blogs can and will die of old age. Nobody wants to constantly visit a blog that takes forever to update. Try to keep your blog updated every day, so subscribers know they have something interesting to look forward to after work. Even better, make multiple posts a day. While it sounds like this could get monotonous, don't worry about it. If you keep the content coming, you'll keep the readers coming. More interesting material means more for people to read, and thus the larger chance that one reader will link his or her friend to your blog.
Connect with your readers. Leave a space open for readers to comment, and when they comment, comment back. Forums are so popular because you have the chance to talk to people and have conversations. Make your comment area seem like a forum. Actively participate in it as much as you write the articles. If readers can talk to you about your writing, they'll keep coming back to respond.
Making money with a blog is a very good idea for those who either want an extra income, or, if they really get a good blog, want one source of valuable income that they can get without leaving their computer chairs.
big seminar 14
The Week Ahead in Health Care <b>News</b> - NYTimes.com
Politicians are campaigning on their health care votes. The Brookings Institution is holding a public forum on ensuring patient access to effective information about prescription medicines.
Call of Duty DS dev "down but not out" DS <b>News</b> - Page 1 <b>...</b>
Read our DS news of Call of Duty DS dev. ... Latest News. Treyarch supports Medal of Honor team . Chrysler issues Call of Duty Jeep . Activision has no plans for online fees . Release Date 9/11/2010; More on Call of Duty: ...
Probably Bad <b>News</b>: Transformer FAIL - Epic Fail Funny Videos and <b>...</b>
epic fail photos - Probably Bad News: Transformer FAIL.
big seminar 14
The Week Ahead in Health Care <b>News</b> - NYTimes.com
Politicians are campaigning on their health care votes. The Brookings Institution is holding a public forum on ensuring patient access to effective information about prescription medicines.
Call of Duty DS dev "down but not out" DS <b>News</b> - Page 1 <b>...</b>
Read our DS news of Call of Duty DS dev. ... Latest News. Treyarch supports Medal of Honor team . Chrysler issues Call of Duty Jeep . Activision has no plans for online fees . Release Date 9/11/2010; More on Call of Duty: ...
Probably Bad <b>News</b>: Transformer FAIL - Epic Fail Funny Videos and <b>...</b>
epic fail photos - Probably Bad News: Transformer FAIL.
big seminar 14
No comments:
Post a Comment