In an effort to secure a more sustainable cycle of funding and donations, the Center for Entrepreneurship has paired with two different venture capital firms to continue supporting entrepreneurial endeavors throughout Ann Arbor and Michigan.
Seven individuals, five of whom are affiliated with Michigan eLab and two of whom are associated with Pinnacle Ventures, have agreed to donate a percentage of their salaries to the CFE on an annual basis. Those from Michigan eLab will each contribute five percent of their profits, while those from Pinnacle will give “a significant percentage” of earnings, according to a release from the CFE.
Michigan eLab, based in Ann Arbor, and Pinnacle Ventures, based in Silicon Valley, both partner with entrepreneurs and help accelerate their businesses by providing capital funds and mentorship in exchange for company equity.
Dean of Engineering David Munson said in a press release that the donations, which have been coined as a “pay it forward” approach, demonstrate an entirely new form of giving.
“The ‘pay it forward’ approach has at its core a fundamental and shared value of entrepreneurship,” Munson said. “Its effects will bring students and faculty into that fold, and significantly impact the future of entrepreneurship education at our college long-term.”
Sarah Bachleda, who heads marketing and communications for the CFE, said the goal of the Center is providing entrepreneurship experience.
“That’s in classroom, out of the classroom, mentorship, networking,” Bachleda said. “(It’s) the whole thing where you’re really getting experimental learning that puts you in the shoes of the entrepreneur and makes you an entrepreneur yourself.”
University alumni Rick Bolander and Bob Stefanski, both managing directors of Michigan eLab, are two of the seven donors.
Bolander said the move by a group of working professionals to commit a portion of their salary to a university on a regular basis is unprecedented.
“The entire management team is basically gifting that profit of their bottom line to a third-party entity,” Bolander said. “I’ve never heard of anyone doing that with any university before.”
Bolander, who was a CFE board member and helped develop the “pay it forward” initiative, said the idea’s inspiration came from his experiences as a student at the University, where financial aid played a large role in his ability to attend.
He added that because the “rich experience at Michigan … exists predominantly outside of the classroom,” it is important that resources like the CFE have ongoing funding to encourage students’ creativity and entrepreneurial spirit.
“Entrepreneurship is as much about collecting the best and brightest talent in a concentrated way and overlaying a culture on top of that that allows for great things to happen,” Bolander said. “When you create a culture of expectation, of disruptive education and greatness, you trap people who want to be there in that world.”
Stefanski, a current CFE board member, said the focus on entrepreneurship at the University has blossomed since his attendance in the 1980s. He added that he wants to promote the idea that entrepreneurship is not limited to tech startups, and feels that the pay-it-forward donations reflect this notion.
“When we talk about entrepreneurship … that doesn’t necessarily just mean starting Google,” he said. “That includes social entrepreneurship. That includes civil rights. That includes people that are thought leaders and being entrepreneurial and paving the way in all sorts of facets of life.”
In the spirit of the diversity of entrepreneurship, Bolander and Stefanski said there will be an opportunity for individuals to specify specifically what their donations will go toward, though currently the donations will go directly to the CFE. For example, both said they would have an interest in endowing student scholarships angled toward entrepreneurship.
“In my mind, that is very much what this is all about,” Stefanski said. “If we can create a greater culture where we have more people saying, ‘I’m going to pay a portion of my future profits back to the University,’ you have a much more sustainable or ongoing flow of resources.”
Bolander said he hopes this system of donation will lead to higher accessibility to post-secondary education.
He called today’s education costs “untenable,” and said they are responsible for creating a “caste system” that excludes others. He added that in the future, he’d like for all students at the University with a grade point average above 3.0 to not have to pay for schooling.