How 4 Chicago Venture Capital Firms Tap Into University Talent
In Silicon Valley, where venture capitalists relentlessly seek the next big thing, firms have hired teenagers as analysts and associates. In Boston, where university students make up a bulk of the population, Rough Draft Ventures backs college startups and hires a new class of student VCs each year.
But the interest in developing VC talent isn’t confined to the coasts. As Chicago’s ecosystem grows, increasingly Chicago venture capital firms are tapping into university talent. Major firms, including Pritzker Group Venture Capital, Promus Ventures, MATH Venture Partners, Chicago Ventures, Hyde Park Angels and Lightbank, have internship programs where MBA and undergraduate students source deals, research companies and provide insight on industries unfamiliar to partners.
But given the Chicago ecosystem is still forming, every firm uses this talent a bit different. Here’s a look at how four local VC firms found unique ways to tap into the city’s emerging talent.
Hyde Park Angels: Growing the Chicago ecosystem through student associates
Hyde Park Angels has three internship programs for three types of students. There’s an undergraduate internship program, which brings in students from Northwestern and University of Chicago to work on research projects, plan marketing and communications, and assist on deals. There’s a year long program for MBA students, in which students receive rigorous training, mentorship from across the firm and take on the responsibilities of a regular associate. Hyde Park Angels also takes interns through The Bunker, an organization that works with veterans in entrepreneurship.
Interest from students has increased dramatically in recent years, said Alida Miranda-Wolff, associate manager at Hyde Park Angels, who was hired two years ago after working as an intern herself. Recently, she looked through 187 applications for two undergraduate intern spots (in previous years, she would sort through 25 or so applications).
For Hyde Park Angels, cultivating this talent is about growing the ecosystem. Hyde Park Angels developed a curriculum for their MBA students along with Origin Ventures, Chicago Ventures, Lightbank and others so students can learn from a variety of perspectives and get connected to firms across Chicago’s VC landscape. So far, 50 percent of their MBA interns have gone onto work in venture capital, said Miranda-Wolff. “We’re priming students to be great associates, and feed into any of the VC firms in Chicago,” she said.
“One thing that is really advantageous for firms especially as the Chicago ecosystem grows, is to develop these programs early,” she added. “So that two years down the line when you are hiring, and you do need a new associate or communications person…you actually have a bunch of people that you know would understand the industry, you’ve worked with before and have been proven.”
Chicago Ventures: A fellowship ambassador program that stretches throughout the Midwest
Chicago Ventures focuses on early stage startups in the Midwest. But being headquartered in Chicago, it can be tough to have an ear to the ground in Lincoln or Cincinnati. With that in mind, Ezra Galston, senior associate at Chicago Ventures, launched Chicago Ventures’ fellowship program, which trains select group of students, mostly undergraduates, from universities across the Midwest on sourcing deals on campus. “We’ve got some of the premier engineering programs in our backyard,” said Galston. “It felt like a missed opportunity if we weren’t connected on a fundamental level with those universities.”
Fellows come from local schools such as University of Illinois and Northwestern, but also from schools like Purdue University, Washington University in St. Louis, University of Cincinnati, Miami University and University of Michigan. Once a class of about ten students is chosen, fellows spend two days in Chicago where they attend meetings, hear pitches and get a sense of Chicago Venture’s investment thesis. Students go back to campus, but keep in touch through a weekly Google Hangout, where they pitch a startup or technology from their region, and a Slack channel where they discuss topics in tech and venture capital.
Galston said they’ve made one investment from a company they connected with through a fellow, but he more so sees it as a long term play to get connected to some of the top talent coming out of the Midwest.
“I think you get to cultivate relationships with people who are not just going to take a senior level job out of school, but work at multiple startups, multiple companies, and teach us a lot about going through the process,” he said.
Pritzker Group Venture Capital: Student startup “battle royale” with a $50,000 prize
In addition to a more traditional internship program for MBA students, three years ago Pritzker Group Venture Capital started the Pritzker Fellows program which provides select Northwestern Kellogg and UChicago Booth student startups training, resources, mentorship, funding and the shot at a $50,000 investment. The firm selects four of the top student startups from each business school (often the winners of schools’ annual venture challenge, but startups have to be software or IT-related), gives each startup $20,000 in funding and pairs them with a mentor from the VC firm. Student startups can work out of 1871 and have access to Techstars programming. At the end of the summer, students pitch their startups in a “battle royale” competition for a shot at an additional $50,000 investment prize.
Startups that have gone through Pritzker Group’s fellowship program include Edovo, ExplORer (pictured left), Tovala, and Page Vault, and many have gone on to raise significant capital said Ablorde Ashigbi, associate at Pritzker Group.
“The problem we saw in the entrepreneurial ecosystem is that a number of talented young entrepreneurs from Kellogg, from Booth, and a number of other colleges around the country were interested in starting companies,” he said. “But come summertime, they had to make the decision between ‘Do I go to McKinsey and make a really large salary and set myself up for a stable career path to success, or do I take the entrepreneurial plunge?'”
“What we wanted to do was use our experience, our network, and our resources, to help…entrepreneurs start new businesses and receive initial funding,” he added.
OCA Ventures: Students as a source for insights
OCA Ventures turns to MBA and undergraduate interns when considering an investment in an unfamiliar area. For example, undergraduate interns helped the firm work through a recent deal in the video game space, said Tamim Abdul Majid, an associate at OCA. “We love working with students because they really are connected to a lot of the newer technologies and solutions that people are building,” he said.
And in doing so, OCA hopes to give those entrepreneurship-minded students an idea of what it’s like to be a venture capitalist versus an operator. “It’s about giving them a sense of empowerment, because we will base a lot of our thought processes off of someone’s review or analysis,” he said.
“We give them associate-like capacity,” he said. “We trust someone’s judgement.”
OCA has seen a “huge increase” in the number of students interested in their MBA and undergraduate level internships, said Majid. He hesitated to say there was one type of student who expresses interest–Majid said he’s seen everyone from a technical programmers to dorm room founders to women who want to source in female-focused industries, and they have interns from a variety of universities. Regardless, he said they’re excited that they can help students feed into Chicago’s growing entrepreneurship ecosystem in any way.
“Whether they become entrepreneurs, whether they join venture capital, or decide to do something else, it all ties into how we view the ecosystem,” he said.
Twitter @karishustad
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