A Head Start
Venture capital firms are taking a new interest in student-owned businesses.
To attract student entrepreneurs to the 2007 Summer Entrepreneurship At Highland program, HCP invested a total of $60,000 and divided it among student teams. The teams also had access to investment and business experts to help craft ideas and market strategies. HCP didn't create the program fully expecting to fund deals at the end of the summer, but Gaiss says the company is currently in talks to do just that with a few of the participating student companies. (Students interested in the 2008 program should visit hcp.com/summer for more information.)
Among those benefiting from HCP's summer program are Alain Chuard and Victoria Ransom, co-founders of IncFuel, a Cambridge, Massachusetts-based tech company that designs products for the travel industry. With their first prototype--a web application designed to help travel service providers market, distribute and package their services--finished last fall, Chuard, 34, and Ransom, 32, relished not only the free office space and business guidance but also the networking opportunities that the program provided. "We were able to speak to people in the travel industry who we wouldn't have spoken to otherwise," says Ransom, a second year MBA student at Harvard. Because of their experience, Chuard, an MBA student at Stanford, says they plan to seek VC financing after they launch their first product--and they're going to start by talking to HCP.
The co-founders of Paragon Lake in Lexington, Massachusetts, also participated in the program. Matt Lauzon and Jason Reuben, both 23 and 2007 Babson graduates, originally conceived of their company to sell fine jewelry online. But during their last year at Babson, they shifted focus and began selling custom-made jewelry through established jewelers. With a new business plan in hand, the pair gleaned expertise from HCP and recently closed a round of seed funding with the firm. "It's important to ask the VC just as many questions as they're asking you," advises Lauzon. "Not all VCs are alike."
The student-run Dakota Venture Group, which launched in September 2006 at the University of North Dakota's Center for Innovation, knows college entrepreneurship from every angle. The students manage the fund 100 percent, investing in high-growth companies in the region. Managing directors and UND students Lee Groeschl, Amy Indridason, Shannon Pearson, Chris Virta and Dan Waind are committed to investing in early and seed-stage companies, especially UND student and alumni businesses. For student entrepreneurs looking for VC, they advise being articulate about your business and capable of answering questions on the fly. "Present your information concisely and clearly because [investors] see a lot of different businesses," says Indridason. "Make it stand out yet be consistent and clear so it's something they can absorb very easily and quickly."