Atland Ventures quietly launched about two years ago. Today, its 23 members manage $150,000 and recently participated in fundraising rounds for two buzzy local startups: St. Paul-based Structural and Minneapolis-based Dispatch.
The most interesting aspect of Atland, however, is not its portfolio companies or the amount of capital it manages – it's the firm's leadership. Atland Ventures is run entirely by college students at the University of Minnesota.
Atland Ventures got its start the way most groups do on a college campus. A handful of students realized that the university did not offer any classes or clubs for those interested in venture capital investing. With the support of the U's Holmes Center for Entrepreneurship, these students set up their own venture capital firm.
"Students realized that even though you may be interested in entrepreneurship and finance, you don't get exposed to how entrepreneurs raise money for their ventures and how investors evaluate startups," said Lucas Vaz, managing partner at the fund and a senior at the University of Minnesota.
Atland is more than just a casual college club. It's a real venture capital firm in just about every way, and few are accepted into its ranks. Vaz told Minne Inno that Atland had 120 applicants this year, and just eight were accepted.
University faculty support Atland by helping with recruitment, providing professional connections and assisting with the due diligence process during investing. However, they don't make any decisions for the fund. Atland is independent from the university.
"Advisors are a final check on diligence. They may agree or disagree with our assessment of a company, but they do not have any veto power," said Matt Jessen-Howard, a director of the firm that joined Atland this spring. "It's a good way for students to get the perspective of really successful people in the entrepreneurship and venture space."
Atland works with groups like Gopher Angels, a Minneapolis-based network of angel investors that mostly backs Midwest startups, to source its deals. Students then perform rigorous research on the company and its industry, which they present to potential investors like Gopher Angels.
"We want to bring the level of research that you typically see with large venture capital rounds to angel-sized investments," Vaz said.
"Individual angels don't have time for this kind of research, but we have a large group of students completely dedicated to the diligence process," Jessen-Howard added.
Like most VC firms, students earn compensation through carried interested, which represents a cut of profits received by investors in the fund.
Atland Ventures received its original pool of capital from an alumnus whom the group declined to name. It made its first two investments earlier this year, backing Structural, which makes human-resources software, and Dispatch, which makes an app for B2B deliveries. Other investors in these rounds included local big names like Gopher Angels and Revolution's Rise of the Rest Fund.
With its current fund, Atland plans to invest between $10,000 and $25,000 into each portfolio company. The group is in the process of raising its second fund, which they hope to close at $1.3 million. After that, Atland aims to invest an average of $30,000 in around 35 companies.
Of course, there's a good chance that Vaz and Jessen-Howard won't be around to see this new fund through – both are seniors and expect to graduate this spring. How can a VC firm maintain stability when its partners, directors and other members leave every few years?
Atland believes that it can tackle this continuity issue with the support of the university, which helped them set up a special curriculum for students with the firm. Atland also hopes to recruit underclassmen, specifically sophomores, so that they are able time to spend more time with the fund.
"I think that what we're trying to build will become the new gold standard of entrepreneurial education in schools," Vaz said. "It's just so active and involved that it hasn't been done before."
