In 2006, the National Venture Capital Association launched MAGNET USA, an initiative to promote U.S. competitiveness through improvements to education, immigration, research and development and our capital markets system.
As an industry, the venture capital community dealt regularly with issues on three of the four MAGNET areas. We were prepared to identify and support specific agendas on immigration reform, basic research funding and Sarbanes-Oxley reform.
Yet, identifying areas where the venture capital industry could engage in a meaningful and relevant way in education reform was challenging. It was not for a deficiency of the problems to be solved or a lack of enthusiasm among our members. In fact, most NVCA members already supported education reform in some way. Some members taught at universities or local public schools, others supported the creation of charter schools, still others offered scholarships and endowments.
Given the fragmentation of our membership’s education efforts, the NVCA sought ways to engage in areas of education that directly impacted our industry. Improving math, science and entrepreneurship education in primary and secondary schools across the country resonated with the venture industry’s need for more home grown mathematicians, scientists and technologists.
We joined the STEM (Science, Technology, Engineering and Mathematics) Education Coalition, which supported legislation that sought to improve teacher quality, broaden AP classes and make financial aid more accessible in those particular disciplines. And we actively participated in Entrepreneurship Week for school age children in 2007.
But we recognized we needed to find more opportunities to improve the infrastructure of our public schools in a manner that is consistent with the entrepreneurial spirit of our industry. In May 2008, we found that opportunity and launched the K-12 Education Infrastructure Fund alongside NewSchools Venture Fund.
This philanthropic fund, which is open to NVCA members, will invest exclusively in education entrepreneurs. It is designed to provide financial resources and strategic guidance to those who are creating innovative and scalable ventures focused on the human capital, infrastructure and performance tools that our schools desperately need.
There is no better reward than improving education in our country for generations of children.
As the fund will invest in both profit and not-for-profit entities, all exit proceeds will be returned to the fund for future use. Venture capitalists who contribute to the fund also have the opportunity to mentor the portfolio companies and support their growth through strategic counsel.
Just as venture capitalists seek to commercialize what has not been done before in the areas of technology, life sciences and clean technology, education entrepreneurs look to change they way we think about what is possible in public education
For example, the K-12 fund might invest in new recruitment training programs for teachers and principals, assessments and data systems to guide instruction and inform parents, or open source solutions for curriculum and assessment. Like a pure play venture fund, there will be an investment committee that makes the go or no-go decisions. As with all funds, we will seek to measure our performance over time. We hope to report to our membership each year on the number of students impacted by the K-12 fund.
The NVCA chose to work with NewSchools because of its successful track record and keen understanding of the venture capital industry. Founded in 1998 by social entrepreneur Kim Smith and venture capitalists John Doerr and Brook Byers, NewSchools has successfully managed three funds to help grow more than two-dozen high-performing organizations, including Teach for America, Teachscape, New Leaders for New Schools and GreatSchools.net.
The NVCA-NewSchools K-12 Education Infrastructure Fund is a vehicle that allows the venture capital community to support education reform in a manner that is consistent with our ideals and our business model. The venture industry prides itself in funding the riskiest ideas for the greatest reward. And there is no better reward than improving education in our country for generations of children.
Mark Heesen is president of the National Venture Capital Association in Washington, D.C. He may be reached at firstname.lastname@example.org.