“It’s a drop in the bucket compared with Silicon Valley
investments, but for an early-stage company the amount can be the
bridge that gets it to the next round of fundraising,” Kim says.
Another key component of the Stanford GSB Impact Fund is
leadership. Students are challenged to lead teams and motivate
their teammates, who all have competing priorities. They work on
specific development goals they set for themselves in other courses.
In the fall quarter of 2017-18, Kim and his team began screening
CEOs over the phone. This time Kim wasn’t nervous. After the
previous year’s experience with Finch and RocketLit, plus a
summer internship at Owl Ventures where he’d made more than
40 of these calls, Kim and other students had refined the script:
What was your journey to entrepreneurship? Tell me about
your product and business model. Describe your team and your
traction so far.
By the spring, the education team narrowed it down to two
startups and began analyzing each. The next step for each team was
to draft investment memos — detailed 10- to 15-page documents
proving why this company, why this model, why now.
“We basically had two weeks to get from nothing on paper to
“It’s rare for a junior
two full-fledged memos,” Kim says. He estimates that he and his
teammates spent anywhere from five to 15 hours each week on the
Impact Fund, on top of normal coursework. They often worked on
the fly. He and his team, for instance, had to write the investment
memos the week of spring break. With the deadline looming,
Kim was in Japan, awaiting his U.S.-bound plane after a trek with
classmates. He worked from the Tokyo airport, adding comments to
the groups’ shared Google doc. Other classmates signed on to edit
from Kenya and Rwanda, where they’d been traveling on a Global
Study Trip examining global value chains.
“We had a stellar team and all pushed to get this through,” Kim
says. “There were many late nights hammering it out so we would
end up with a polished product.”
Unlike a summer internship, the Impact Fund gives students
experience in each stage of the process, from cold calling
team member to have
an investment, from
sourcing right down to
cutting the check.”
entrepreneurs to managing portfolio companies. By the
spring of 2018, Kim had been through the cycle nearly t wice.
Only presentations to the investment committee and final
But, as with any investment firm, getting the committee on
board isn’t easy. Teams often arrive at what feels like the finish line,
only to be sent back to the start. Last year’s food and agriculture
team made the case for the committee to invest in a venture that
created grazing software to help cattle farmers. The startup seemed
like a great fit: potential for growth, lasting impact, innovation
in the industry. But the committee disagreed, insisting anyone
would have difficulty proving the company makes significant
environmental impact, because, after all, it was still beef
production. The committee advised the food and agriculture team
to look into companies in the alternative protein space.
Kim and his team also met challenges when they argued the
case for PenPal Schools, an online learning platform that connects
students across the globe. Committee member Heidi Krauel
Patel, a partner at Rethink Impact and lecturer in management
at Stanford GSB, challenged the team’s projections of a 12%–13%
return. Other committee members questioned the platform’s
capacity to create real change if it was based predominantly in
affluent schools around Silicon Valley.
“How do you measure impact? That’s a billion-dollar question,”
says Loretta Gallegos, associate director of the Center for Social
Innovation at Stanford GSB. “It’s a real-time issue the industry is
wrestling with right now and a question students must discuss at
length.” Gallegos works with each team throughout the year and
helped create the program.
Kim and the education team countered the committee’s
questions. The projections were their own conservative estimates,
Kim says. They also pointed out that impoverished students in
African and Latin American countries waited in line for hours to
use their school’s computer and write their pen pals in Palo Alto.
The committee ultimately voted to support PenPal Schools.
The venture received $75,000. It was the third edtech company to
receive money since Stanford GSB Impact Fund’s inception in 2015.
After graduating in 2018, Kim accepted an offer at Reach
Capital. He says the transition to a firm that invests in education
technology has been smooth. “It’s rare for a junior team member to
have experience leading an investment, from sourcing right down
to cutting the check,” he says. “Being able to go through the process
not once, but twice, has really set me up for success in my current
role.” — JENN Y LUNA