Emory University Launches Student Venture Fund for Underrepresented Startups

Emory University Launches Venture Fund Focused on Underrepresented Founders

Higher education often emphasizes theoretical knowledge, yet practical experience can be invaluable. Students at Emory University sought a way to gain hands-on experience in venture investing while simultaneously addressing a critical need: funding for startup founders from underrepresented groups. This ambition is now becoming reality with the Peachtree Minority Venture Fund.

Origins in Research at Goizueta Business School

The concept for this fund stemmed from research conducted at Emory University’s Goizueta Business School. Willie Sullivan, alongside Kristen Little, Chis Anen, and Alan Quigley, investigated the challenges faced by underrepresented entrepreneurs in the Atlanta metropolitan area.

“Our interviews consistently revealed a significant obstacle for Black entrepreneurs: limited access to capital,” Sullivan explained. “We aimed to determine how the university could actively contribute to resolving this issue.”

Addressing a Long-Standing Problem

The research team recognized the persistent nature of this challenge, acknowledging the lack of definitive solutions. Sullivan noted that other universities had successfully implemented student-run venture funds, inspiring him to explore a similar model at Emory.

The goal was twofold: to provide students with practical experience in venture capital and to direct funding towards companies often overlooked by traditional investors.

A Unique Experiential Learning Opportunity

The team identified a gap in Emory’s business curriculum. A student-run venture fund would offer an unparalleled experiential learning opportunity, allowing students to engage in real-world investments, conduct thorough due diligence, and perform comprehensive financial analysis.

Beyond simply investing, the fund aims to actively address the capital gap identified in their research, specifically targeting Black, Native American, and Latinx founders.

Building a Diverse Investor Network

“[Our fund will] distinguish itself by focusing on several key areas,” Sullivan stated. “We will be making equity investments in underrepresented minorities, and simultaneously cultivating a diverse group of investors, encompassing various racial and ethnic backgrounds, who are passionate about this type of entrepreneurship.”

Sullivan believes that cultivating a new generation of investors attuned to diverse businesses will have a lasting impact, influencing investment decisions beyond their time at Emory.

Securing Seed Funding

Establishing the fund required initial capital. While many student venture funds rely on alumni donations, Sullivan pursued a different avenue. Presenting his vision to Goizueta interim dean Karen Sedatole proved successful, resulting in a $1 million allocation from the school’s endowment.

“Dean Sedatole has consistently championed racial equity and justice initiatives at the school,” Sullivan said. “Upon reviewing our plans, she readily committed endowment funds to support the fund’s creation.”

Coursework and Advisory Board

The fund’s operations will be integrated into a Goizueta Business School course, overseen by a faculty member. Students will learn the technical aspects of investing, including cap table analysis and financial modeling, alongside exploring diversity, inclusion, and unconscious bias in investment strategies.

An advisory board comprised of Atlanta-based organizations – including The Russell Center for Innovation, Atlanta Tech Village, and Venture Atlanta – is being established to provide guidance and expertise to the student investors.

Fund Structure and Investment Strategy

The fund will be managed by three students serving as managing partners, responsible for organization and deal sourcing. They will also act as teaching assistants, supervising senior associates and analysts, mirroring the structure of traditional venture firms.

Successive managing partners will be selected from the previous year’s staff, ensuring continuity within the program.

The firm plans to make investments ranging from $20,000 to $25,000 annually, alongside a micro-investment fund offering smaller checks of approximately $10,000 to early-stage companies with underrepresented owners.

“We also aim to support entrepreneurs in the initial stages, those with promising ideas and some initial traction, who may require a small investment to accelerate their progress.”

Timeline and Next Steps

Currently in the formation phase, the inaugural course is scheduled to begin in January, with the first investments anticipated in March. Sullivan and his team have already compiled a database of 100 to 150 potential investment opportunities.

“We are actively preparing for launch, familiarizing ourselves with the landscape and building relationships,” Sullivan concluded. “Our goal is to be fully prepared to make those initial investments in March.”