SALT LAKE CITY & PHILADELPHIA–(BUSINESS WIRE)–Diving in for a swim-with-the-sharks approach to entrepreneurial business education, students from the Wharton School of the University of Pennsylvania, the oldest collegiate business school in the world, are now working with University Venture Fund (UVF), the nation’s first and largest student-run private equity firm. UVF students raised an unprecedented $18 million from limited partners to invest in the high-risk/high-reward world of venture capital.
UVF, an $18-million education-based private equity fund managed by students, recently established an arrangement to work with a select group of Wharton students. The 10 Wharton MBA students will engage in UVF’s unique educational program helping put the fund’s millions of dollars to work investing in promising — but risky — start-up businesses they believe have a lucrative future. A group of Wharton students had been working informally with UVF for the past 18 months.
Founded in 2001 at the University of Utah’s David Eccles School of Business, UVF is an independent, self-sustaining venture capital company committed to the entrepreneurial education of students at participating universities. The hands-on approach of business students using real money in the venture capital industry was pioneered by UVF, which raised a record amount of investment funding from high-profile limited partners. These limited partners want to nurture the next generation of entrepreneurs, but expect a fair rate of return on their money as well.
“There is no other program like it in the world, as far as I know,” said Fred Huang, a Wharton MBA student who is the director of the student-run Wharton UVF. “We are very excited to be involved, and there has been a great deal of interest. More than 50 students went through our formal application process. From them, we selected a strong team of 10 students and four advisors. To give a sense of the diversity and depth of the group, we have a Fulbright scholar, the ex-CTO of NASA, and a student who holds an M.D. from Johns Hopkins. Our group includes students with extensive work experience at places like Microsoft, Google and Goldman Sachs — and members of our team speak a combined seven languages.”
“We’re delighted that students from the Wharton School are now officially on board,” said Jared Hutchings, founder and managing director of UVF. “The Wharton team of students offers exceptional expertise from previous work experiences and brings a rigorous analytical approach that reflects the strong Wharton MBA curriculum, so they will be a great asset for us. And UVF can help the Wharton students gain venture capital experience in a very hands-on way. There’s no better training than investing real money in real entrepreneurs.”
As venture capitalists, UVF students research entrepreneurial companies that are tricky to bet on, even for professionals. The start-ups which they believe will be successful are then pitched to the fund’s full-time managing director and an investment committee that oversees the UVF portfolio. The private equity companies participating with UVF may invest in these small start-ups as well, using the students as their eyes and ears to uncover potentially successful new products and services towards which the students gravitate.
One early UVF investor was Tim Draper, a high profile Silicon Valley venture capitalist, who was also an early investor in Hotmail, Skype, and Baidu, dubbed “the Google of China.” The Salt Lake City family of two ultra-successful entrepreneurs, billionaire medical device inventor James LeVoy Sorenson, and son James Lee Sorenson, founder of Sorenson Media, contributed the initial $500,000 to UVF with the provision that UVF structure itself to become self-sustaining.
UVF’s first 10 investments were BaroSense Inc., LignUp Inc., Omniture Inc., Socialtext, Chakshu Research Inc., Infinera, HandiQuilter, InteliSum, Merrimack Pharmaceuticals and Alianza Global Communications Services.
About University Venture Fund
Founded in 2001 at the University of Utah’s David Eccles School of Business, University Venture Fund (UVF) is an independent venture capital firm committed to improving the quality of entrepreneurial education for a diverse group of students at its participating universities. The fund is a collaborative effort between students, universities and the professional investment community in which students raise capital, perform due diligence on venture capital opportunities and make investments. In addition to being the largest fund of its kind, UVF is the first fund for which students raise all the capital and the first student-run fund that has a traditional limited-partner relationship with its investors. Each year UVF hosts University Private Equity Summit when business students from around North America gather to share best practices and learn from investment industry professionals. Online at www.uventurefund.com and www.uventurefund.com/wharton.