University of Michigan Social Venture Fund

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The University of Michigan Social Venture Fund ( SvF ) is the first student-run social venture fund in the United States. [1] Established in 2009 by four Ross School of Business MBA students, the Social Venture Fund invests in innovative and mission-driven social enterprises. The SvF is overseen by Professor Gautam Kaul and housed in the Zell Lurie Institute for Entrepreneurial Studies at the University of Michigan. [2] [3] [4]

Social venture capital is a form of investment funding that is usually funded by a group of social venture capitalists or an impact investor to provide seed-funding investment, usually in a for-profit social enterprise, in return to achieve a reasonable gain in financial return while delivering social impact to the world. It deviates from the traditional venture capital model, which focuses on simple risk and reward. However, there are various organizations, such as venture philanthropy companies and nonprofit organizations, that deploy a simple venture capital strategy model to fund nonprofit events, social enterprises, or activities that deliver a high social impact or a strong social causes for their existence. There are also regionally focused organizations that target a specific region of the world, to help build and support the local community in a social cause.

<i>Ross School of Business</i>

The Stephen M. Ross School of Business (Ross) is the business school of the University of Michigan. Numerous publications have ranked the Ross School of Business' Bachelor of Business Administration (BBA), Master of Business Administration (MBA) and Executive Education programs among the top in the country and the world.

A social enterprise is an organization that applies commercial strategies to maximize improvements in financial, social and environmental well-being—this may include maximizing social impact alongside profits for external shareholders. Social enterprises can be structured as a for-profit or non-profit, and may take the form of a co-operative, mutual organization, a disregarded entity, a social business, a benefit corporation, a community interest company, a company limited by guarantee or a charity organization. They can also take more conventional structures. Social enterprises have both business goals and social goals. As a result, their social goals are embedded in their objective, which differentiates them from other organizations and corporations. A social enterprise's main purpose is to promote, encourage, and make social change. Social enterprises are businesses created to further a social purpose in a financially sustainable way. Social enterprises can provide income generation opportunities that meet the basic needs of people who live in poverty. They are sustainable and earn income from sales is reinvested in their mission. They do not depend on philanthropy and can sustain themselves over the long term. Their models can be expanded or replicated to other communities to generate more impact. A social enterprise is more sustainable than a nonprofit organization that must rely on grant money, donations or federal programs alone. As a for-profit model, you control the curriculum and funding of the program. The incentives of the company are designed such that greater impact directly correlates to a great profit. Investors and business partners today want to know that the companies they choose are doing more than just providing a product or service. They look for companies that are doing good. They will feel a special connection to companies whose values align with their own.

The SvF aims to strengthen the leadership of the Ross School of Business by integrating social and environmental issues into business school education.

The Fund’s members are currently organized into a non-hierarchical structure that includes a lead team and four circles of interest – Education, Food Systems & Environment, Health, and Urban Revitalization (focused on Detroit). [5] [6] The SvF was awarded with the 2010 Ross MBA class gift. [7] The Social Venture Fund is the University of Michigan's third student-led fund, joining the early-stage Wolverine Venture Fund and the pre-seed Frankel Commercialization Fund. The Fund made its first investment in late 2011 and its second investment in early 2012. [8]

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References

  1. Bomey, Nathan (21 September 2010), "[http://www.annarbor.com/business-review/social-venture-fund-university-of-michigan-zell-lurie-institute-venture-capital/ University of Michigan students start nation's first venture capital fund for social benefits]", AnnArbor.com Newspaper, retrieved June 19, 2011External link in |title= (help)
  2. Damast, Alison (27 September 2010), "Student Venture Funds Tackle Social Problems", Businessweek, retrieved June 19, 2011
  3. "Samuel Zell & Robert H. Lurie Institute for Entrepreneurial Studies - Social Venture Fund]", Samuel Zell & Robert H. Lurie Institute for Entrepreneurial Studies, retrieved June 19, 2011
  4. Zinsli, Christopher (21 September 2010), "College Showdown: Two Schools Face Off… To Invest Responsibly", Wall Street Journal, retrieved June 19, 2011
  5. "Focus Areas", UofM Social Venture Fund, retrieved June 19, 2011
  6. "Team – Social Venture Fund", UofM Social Venture Fund, retrieved June 19, 2011
  7. Nickson, Mary (30 September 2010), "Ross Launches Social Venture", News Room – Ross School of Business, retrieved June 19, 2011
  8. Kutz, Erin (27 September 2010), "University of Michigan Social Venture Fund Comes Out of Stealth, Aims to Invest in Companies at the Nexus of Public and Private", Xconomy Detroit, retrieved June 19, 2011