In 12 years since its founding, Southern Methodist University’s MBA Venture Fund has grown to $3 million and is providing money to venture capitalists in a variety of industries.
In 2002, two investors put forward $600,000 to begin the fund and give SMU students the chance to gain hands-on experience with venture capital deals. In just over a decade the fund has given money to a gaming technology company, a biotech company, a booking services company and a network technology business, among others.
Periodic distributions of capital and exiting two investments has brought the fund’s cash to the $3 million mark. In 2011, SMU’s fund left an investment, resulting in a $273,809.29 payment from co-investor Lone Star CRA Fund.
The venture fund is run by MBA students taking the university’s Venture Capital Practicum course. Students decide what deals to consider before evaluating the pitch and deciding whether to recommend the venture to the fund’s board of directors. The board then decides whether to give the pitch a go-ahead.
“The MBA Venture Fund was started to teach students that wanted to know about how venture investments are made and to give them some practical experience,” said Jerry White, director of the fund. “That requires students to source, evaluate and recommend investment opportunities to the fund.”
Students are chosen for the program through a highly-selective process, White said. Moving forward, he hopes to increase involvement and place more students to receive private equity and venture capital funds after graduating.