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University-Industry Engagement Advisor

Student-run VC teaches investing while boosting VC access for minority founders

By Jesse Schwartz
Published: February 10th, 2021

A detailed article on the Kansas City University Venture Fund appears in the January issue of Technology Transfer Tactics. To subscribe and access the full article, click here.

Although entrepreneurship has become a common element of many college curriculums, the venture capital (VC) side of the equation is not often covered in depth. Students in entrepreneurship programs sometimes are left with a vague idea of how a start-up raises capital or how investors decide where to place their bets.

Student-run venture funds, such as the Kansas City University Venture Fund (KCUVF), can close this gap in entrepreneurial investment knowledge. Under Royal Street Ventures’ guidance, students engage in KCUVF’s curriculum focused on entrepreneurial investing while semi-independently operating as venture partners: identifying potential real-world investments, conducting due diligence, and making investment recommendations to VC investors. They do so within the context of helping to boost economic development in the region, including the creation of Founders’ Lab, a program that promotes access to venture capital for female and underrepresented minority founders.

KCUVF is a multi-year program for students in the Kansas City area. It is anchored with a 12-week curriculum offered each fall, followed by real-world projects benefitting regional firms, accelerators, and the entrepreneurial ecosystem. The curriculum teaches private finance and venture capital to undergraduate, graduate, and PhD students. In addition to classroom learning, the students offer services to regional venture firms and accelerators and do a few key projects to support entrepreneurship in the region.

Each student — there are 20 in each cohort — spends about seven to ten hours a week on KCUVF involvement: they meet as a group for about two hours each week and spend an additional five to eight hours per week on the program, either remotely or at a co-working space in Kansas City provided by Royal Street Ventures. Royal Street launched the program in 2017 with support from the Kauffman Foundation.

In addition to formal learning, the students work on specific projects for venture firms, including due diligence, company and market analysis, and competitive analysis. The students also make investments through Royal Street Ventures. They search out investment opportunities among early-stage technology companies, source deals, discuss the deals among themselves, summarize their findings, and then decide as a group if they want to move forward. At that point they form a team of five students who go through a full diligence process, then present their investment recommendation to the entire group of students. The group votes on whether or not to move forward and submit the investment proposal to Royal Street Ventures.

When evaluating companies, students primarily look for software-based technology companies in the Midwest, a traditionally underserved venture market. “We like capital-efficient businesses that won’t need to raise a lot of money,” says Michael Svoren, KCUVF associate and a senior at the University of Kansas. “We look for strong teams, teams that we feel can build whatever they are building and surmount the challenges that they will undoubtedly face.” Each year, the students evaluate “dozens” of start-ups, adds Maggie Kenefake, venture partner at Royal Street and the program’s primary advisor.

The KCUVF students also work with Kenefake conducting due diligence for the Fountain Innovation Fund, an evergreen fund led by Kenefake and supported by the Enterprise Center in Johnson County, KS (ECJC), a nonprofit venture development organization. The Fountain Innovation Fund invests in pre-seed and seed deals in the region. With Kenefake’s guidance, the students and the companies go through the vetting process and apply for funding. They also sit on the calls with the founders and help Kenefake prepare recommendations to present to her investment committee. “The students are the backbone of that fund,” says Kenefake.

Describing the goals of KCUVF, Kenefake says “we’re hoping to affix [students] with the skills they need to understand what investable and scalable companies look like. What we want the students to see are as many different kinds of companies, investors and firms, and ways of investing as we can.”

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