When Sophie Starck and John Diorio joined the entrepreneurship program at Brown University during their freshman year, they realized that while Brown has great resources for student founders, it did not have those same resources for those interested in venture capital.
The two have now graduated, but they have left behind a lasting legacy by launching Brown’s first student-run venture fund.
Van Wickle Ventures invests in startups affiliated with Brown University and the Rhode Island School of Design. The ventures can be run by current students or alumni.
“The fund serves as a gateway for students either starting a career in VC or who want to learn about entrepreneurship,” Ved Narayan, co-director of Van Wickle Ventures, told Rhode Island Inno. “It’s an actual fund, but also a platform for education on VCs.”
It took Starck and Diorio about two and a half years and a generous $150,000 donation from Bob Place, Brown class of 1975, to turn their vision into reality. Van Wickle Ventures has now been up and running for about 18 months.
The fund writes checks between $10,000 and $25,000, typically following the terms of the lead investor or invested through a SAFE note with a cap and discount. All profits made are put back into the fund so it can continue to operate for years to come.
It also serves as a training ground for students interested in becoming investors. Van Wickle Ventures offers students an immersive learning program, as well as the opportunity to get hands-on experience investing in startups.
The application process for the program opens in November and typically attracts about 100 applicants. The field is whittled down to 20 to 30 students for interviews, and about nine or 10 students are eventually selected to join the program.
New students are then put through a six-month educational program designed around guest speakers and activities that teach the new fund members the basics of VC. At the end of the six months, the students are made associates for the remainder of their time at Brown and can begin researching potential investments.
Each week during the semester, student associates pitch startups they have sourced and spoken with to the rest of the Van Wickle team. If members like the startup, they set up a series of phone calls to speak to the founder and learn more about the company.
If they still like the idea, a smaller subset of two to three analysts will conduct due diligence and draft an investment memo, which they pitch to the Van Wickle Investment Committee, a group of experienced venture capitalists such as Place, who will evaluate the companies and ask questions.
The student associates then go back to the startup to gather more information and answer remaining questions from the Investment Committee. If the Investment Committee still likes the startup after all this, the fund will write a check. The whole process can take anywhere from a few weeks to a month.
“We are a small team and we work quickly, and we can reach out to people and do due diligence quickly compared to other big investors,” said Asif Khan, co-director at Van Wickle Ventures. “That’s because we are not investing as much money, and we have more personal relations with these founders, because we have that connection through Brown.”
Khan said the fund is comfortable making investments across all stages, but typically ends up investing in companies that are a little farther along in their entrepreneurial journey because they normally have some revenue and more data for the investors to work from.
Narayan added that companies seeking investments must have at least one founder working on the venture full time. That doesn’t mean they have to leave school, but they do need to work on it over the summer instead of taking an internship.
So far, the Van Wickle team has one startup in its portfolio: the company 305 Fitness, a dance-cardio fitness company based in New York that offers over 500 classes a week across six studios and three pop-ups in major U.S. cities.
Although the Covid-19 pandemic has slowed things down, Narayan and Khan have a few investments in the pipeline they hope to execute on soon or when they get back to school. They said they would like to see Van Wickle make at least one investment per semester. Once they return to Brown, they may also look to raise additional money for the fund now that it has succeeded with its proof of concept.
