The National Venture Capital Association has partnered with non-profit NewSchools Venture Fund to raise a $10 million (€6.5 million) K-12 Education Infrastructure Fund.
K-12 refers to Kindergarten through high school, grades in which the fund wants to enhance “teacher development and educational infrastructure”, said NVCA board member and VSP Capital partner Joanna Rees. One potential investment being examined is a Wikipedia-like platform for curricula. The fund will likely make 10 investments.
The fund’s capital will be raised from philanthropic donations made by the NVCA’s approximately 480 members either as firms or as individuals. NVCA members will also mentor the companies receiving funding.
There is an opportunity to show policy makers there's a way to innovate without having to get stuck in the current system
NewSchools is also in discussions with a number of foundations regarding matching grants, which would double the fund’s size to $20 million, Rees told PEO.
This partnership is intended to advance the goals of the NVCA’s MAGNET USA Program promoting improvements in US education, immigration, research and development and capital markets. Additionally, the NVCA polled its members regarding their philanthropic interests and found that many already contribute to education endeavors.
“We thought, ‘why can’t we harness all this in a collective pool?’” Rees said.
NewSchools has managed three “funds” to date totaling $125 million.
“Funds are a construct of how we do business, not legal entities,” NewSchools partner and chief operating officer Joanne Weiss told PEO. Fund investors, largely foundations, make tax-deductable donations and do not receive profits. NewSchools’ investments can be made in non-profit or for profit companies but all profits are reinvested. The third and current fund aims to raise between $50 million and $75 million.
Kleiner Perkins Caufield & Byers partners John Doerr and Brook Byers founded NewSchools after realising that the return on investment in education was not high enough for traditional venture capital but believing that the venture model could revolutionise the sector.
In addition to the direct impact of NewSchools, “there is an opportunity to show policy makers there’s a way to innovate without having to get stuck in the current system”, said Wees.
The NVCA and NewSchools hope to announce the completion of fundraising at the NVCA’s 35th anniversary event in the fall.