Countless startups, such as Sun, Yahoo and Google (as well as newcomers like Meebo) were started at Stanford, or by Stanford graduates. Now Stanford wants to help its students by providing seed funding directly, and in the process will get a little equity in those new ideas, too.
Stanford Student Enterprises, a Stanford student association with several hundred employees and $13 million in assets, has launched an early stage venture fund called SSE Ventures to invest directly in student founded startups.
Until now, the organization has focused on managing various investments, operating a student banking service, managing Stanford’s phone directors and selling Stanford apparel.
The new entity, founded by Matt McDonald, Matt McLaughlin, Samuel Lipsick and Brian Chavarria, says it will invest $50,000 or $100,000 in each approved proposal from Stanford undergraduate or graduate students.
SSE Ventures has also put together an advisory board to help review proposals. The board includes The Founders Fund, Charles River Ventures and angel investor Rajeev Motwani. Of course, those advisory members will be getting an early look at all of these startups, making it well worth their time.
Wow that’s really smart of Stanford. I mean, take tuition from students, take company share from students.
I bet this will get some outside funding from bigger companies too, and Everett is right…Stanford is the only one really winning on this.
Just for the record, SSE also runs a graphic design business (sdg.stanford.edu) and a web development business (is.stanford.edu). Also, SSE manages the Stanford Directory (not directors) and the Stanford Unofficial Guide. In addition, the organization (SSE) has under 100 employees. ASSU (the student government) has a bit over 100 probably, but not too much more. The $13 million figure also sounds a bit high, so might be worth checking out.
As for the comments above, this was opened as a business opportunity, just like a venture capital fund. All the profits from all the divisions go back to the students, because SSE is the financial arm of the ASSU (student government).
Also, one thing to note: all the names mentioned above (except for one) are exiting the company in the next 2 months, so I’m not sure how much association they will have with the fund.
At the height of the last dot.com bubble, everybody wanted to become an “incubator”. Folks with no business investing and running startups started offering office space or services for equity in lieu of rent/cash. Heck, even the law firm Brobeck went into the office space for startups business.
I predict this will be seen as the height of the web2.0 bubble.
Cool. I hope some new products popout from their BioX building.
Expect Stanford’s endowment to start swelling.
I’m wondering, how hard will it be to get funds from SSE vs. the average Valley VC firm?
If I was paying for my kid to go to uni I don’t think I would be impressed if the college was funding them to dropped their studies I was paying for them to do. Ok I am dropped out myself but that was my own choice but this smacks of a conflict of interest to me. I think they should make it graduate only.
Mike: The University of Canterbury here in New Zealand has been running something similar for quite a while now.
The concept is called ENTRE and basically they help support new startups. They provide business information evenings. Two of the recent events included a screening of ‘Startup.com’ and a speech from the leader of the opposition party (elections are this year).
They also run the ‘40K Challenge’ where you send in your business plan and you will be judged by business leaders. The winner receives $20,000 and $20,000 worth of assistance in a local incubator to turn the startup into a reality.
Although it is seed capital they do not take an equity stake in the startup.
It is completely run by students here at the University and sponsors include IBM and PriceWaterhouseCoopers.
http://www.entre.co.nz/
@ diystartup news: dropping out to start a company (particularly when you can easily go back) isn’t a bad thing. The flexibility that Stanford offers is advantageous to people who want to not hold back on their dreams. This fund is a great start for that.
We need more Young Entrepreneurs.
I get no respect here. What happened to all the iCE artists? Not once has anyone contacted me after dozens of posts here. Are you all lamers? Wake the fuck up. Do you need to hear my asynchronous voice card hacked to 300 baud, then additionally software hacked to 1200? On a fucking XT. You hear me now? Yeah, that’s 1200 cps, maybe a little faster with Zmodem, or slower, depending on line noise.
Hello, I was Napster 1991, ABC club, movie scores were already online. If you want the real goods I can probably hook you up, if you have enough money.
Don’t make me post my protocol-speed science project, I will! Or my U.S. Army Award calculator for my Metallica .STM collection.
Fuck Stanford. What about Boca Raton, birthplace of the IBM PC, birthplace of Boca Reseach, the 305/407? Like you guys invented this shit, Silicon Valley can kiss my ass. Canada was on the map before you guys in Cali. Give me a break.
King’s Quest can bite me. Galacticom was multiplayer gaming in realtime like a decade before Ultima.
You know who coded Doom? A University of Florida dropout.
How’s that for social media.
Not sure, but is this anything like the University Venture Fund in Salt Lake City?
http://www.uventurefund.com/aboutus.php
Students manage the incoming deal-flow while getting trained under professional VCs in the selection and due diligence process. Like VC training for the undergrad.
I’ve met with one of the students that came out of that fund. Fascinating and very prepared.
This is ingenious. Stanford has always led the charge in enabling the transfer of technology to the community. Universities around the world model their program after Stanford’s. Now, they’re making that transition even easier. I hope to see a YCombinator-like program come out of this where the money is second in importance to the advisory board and connections. Congrats Stanford.
It would be great if rest of the universities in the world could adopt the model. but will not favoritism rule these? Its would be interesting to see how unprejudiced the board would be evaluate an idea from a C Grade guy than from a bookie A Graddie.
This is the future of comment moderation, or lack thereof.
@16
You are the future of birth control, or lack thereof.
Several years ago, I sat on the Board of Stanford Student Enterprises. Stanford University stands to benefit nothing from this, but Stanford students themselves stand to gain a lot. SSE is wholly run by students, and profits from SSE ventures go back into a separate STUDENT endowment, the payoff of which goes towards the operating expenses of the Associated Students of Stanford University (the student association). The $13M figure is the size of this separate student endowment.
My question is this: any project that a Stanford student completes within the scope of their coursework is technically owned by the university. This is why Stanford has a huge ownership stake in many tech companies, including Google. How will SSE get around this requirement? Will investments be limited to projects/companies completed outside the scope of coursework? This seems quite ambiguous.
I doubt its a coincidence that this fund came just after famous alums (including a YouTube founder) created their own:
http://www.crunchbase.com/fina.....y-ventures
I wonder which one will be more “founder-friendly”
I’m a student at Stanford in biomechanical engineering - this will be great. Right now, Stanford helps with IP through its Office of Technology Licensing, but this is going to help with the actual business side of things, which most engineers sorely lack.
And @ 1: Yes, Stanford has a lot of money. But believe it or not, they actually try to help students, secure in knowing that we will give back. Sorry if your school was different!
http://www.mercurynews.com/ci_8314377
@20, “Sorry if your school was different!”
Condescend much?
thought all VC money only went to Stanford Phd’s anyway. God knows if you ain’t part of the little elite click of folks you ain’t getting shit.
Might invent something like Facebook with all that brain power
I find this story and the fund very inspirational. I wouldn’t be shocked to see other school add venture funds in the near future. Harvard will be next, my prediction…
People get so up in love with stanford university.
Sure stanford has created some great startups but MEEBO ? what the heck meebo is lame and could be invented by anybody. Meebo is simple and easy. The only reason Meebo stands out from the rest of the bunch is because they got investment . Why they got investment ? cus their from stanford and investors got sucked in.
Even sites like techcrunch each the stanford nonsense.
@ Frank Church
Youre calling someone else out for condescension?
And I quote:
“@fernando, learn some english, then come back and make a comment, moron.”
http://www.techcrunch.com/2008...../#comments
My comment was not meant to be condescending; if someone is jaded from their own school, their feelings should not be generalized here. Stanford has a track record of helping its students, and Stanford students have a track record of giving back out of gratitude.
Interesting. This is a role model that has been thriving in the UK for the past couple of years.
Look no further than Imperial College.
Maybe the UK’s universities will finally wake up to the fact that they are ahead of the Yanks in some things.
The problem with universities especially in the UK is that they get first tibs on ownership rights on what you create whilst your at the university.
Which is pretty poor when you think that its totally down to the students own work and the student has paid for their education. Universities are leeches. No wonder very few students do much research in their spare time.
Similar to drafting basketball players out of high school
So @ 3:
Since the money from the funding goes back into the school, does this mean the developers will be getting a tax write off or are you using that to your benefit as well?
Who the hell are Matt McDonald, Matt McLaughlin, Samuel Lipsick and Brian Chavarria? Never heard of those dudes.
@30:
Departing CEO of SSE, incoming CEO of SSE, co-GM of SSE Ventures, co-GM of SSE Ventures.
Imperial College doesn’t have its own student run fund. I created the student entrepreneurship society there, Imperial Entrepreneurs. Imperial Innovations and the SSE are as far apart as they could be. This isn’t just another tech transfer fund, its a proper seed fund west coast style.
http://www.china-kitchen-cabinets.com
You know who coded Doom? A University of Florida dropout.
How’s that for social media.
Good Lord, what about the idea of the university? The independence of academia? If you have rich people and corporations just buy the people and ideas they like for their products and tech, how can you expect any unbaised, peer-reviewed study?!
Why not just make a separate tech-comany funded college that would be in type and form like a Bible college, and be done with it.
I just made a pledge recently (no where near those numbers) to start an Alumni “seed” fund at the University I graduated from as well. We’re having a kick off on April 17 - pretty exciting stuff.
Why is Stanford copying us
This is a VERY misleading title - SSE has little or no affiliation with Stanford University proper. It should read, “A Stanford Student Organization Launches On-Campus Venture Fund…” instead of Stanford.
It boils down to this. Until some other geographic region in the U.S. produces the caliber companies that Silicon Valley does, other regions will continue to take a back seat. I don’ even live or work in the valley (Louisiana man), but what I can see as an outsider is “Hey, Silicon Valley has the money, media and moguls.”
I guess I should also give Stanford’s women basketball team a “Congrats” for taking down UConn.
I think this is great and I agree that campuses throughout the country should be adopting the model. In fact, I know that Harvard already launched a very similar program a few months back. Sorry Standford peeps, we beat you to it…again…jk.
Check it out:
http://www.harvardstudentagencies.com/i3/
It’s called the Harvard College Innovation Challenge and it was founded by Harvard Student Agencies (HSA) and the Entrepreneurship Forum. HSA is similar to SSE, but it employees more students (over 500) and operates 9 different businesses. It has large scale operations like Let’s Go Travel Guides and The Harvard Shop (www.theharvardshop.com).
I’m all for spurring business and innovation on campuses. Let’s keep on spreading this model