Why We’re Launching SoCal’s First Student-Run VC Fund

Prerit Seth
Sep 9 · 5 min read
California Crescent Fund is Southern California’s first student VC fund
California Crescent Fund is Southern California’s first student VC fund
Follow Us On Twitter @CrescentFund

The world’s top companies have emerged from college campuses. Everyone’s heard the stories of Facebook and Google, but the list doesn’t stop there. Take companies like Squarespace, Snapchat, Dropbox, Reddit, Warby Parker, Fedex, Insomnia Cookies, Dell, and Rent The Runway — all of them were started at various universities while the founders were students.

Student entrepreneurship is very much alive in schools across the map. It’s fueled by strong ecosystems where capital, culture, and resources are abundant and synchronized.

The Student-Run VC Model

There have been a number of venture funds launched in the last decade that invest exclusively in student startups. The success of these startups has been nothing short of remarkable.

In the last few years, student-founded companies have gone on to raise over $1 billion in follow-on capital from the likes of Sequoia, a16z, and Bessemer. Many have already had successful exits.

These funds have established an amazing precedent for the student startup ecosystem. They run on a student-run fund model, where everything from sourcing to diligence to investment decisions is spearheaded by student partners. This is innovative and effective.

Student partners are the closest to the startup ecosystem of their universities. They understand the ins and outs of campus entrepreneurial activity better than any outside investor and they‘re able to cultivate closer relationships with student founders. They also identify millennial and Gen-Z trends better than anyone else, naturally, as they‘re part of the demographic (see 👁️👄👁️)

An Untapped Geographical Opportunity

Despite this rise in student-run funds, there are still major gaps in the existing system. While many of these funds claim to invest agnostically to location or university, there’s a disproportionate amount of focus on East Coast and Bay Area schools. This is observed not only in their investments, but also in the location of their student partners and overall investment force. Most of the investment force is located on the East Coast (Boston, New York, Philadelphia) or the Bay Area. While there’s no denying the high concentration of student entrepreneurial activity in those regions, we strongly feel there’s one region that’s remarkably undervalued.

The Southern California Advantage

Sunny Southern California is the one major untapped market for student-run funds to invest in student entrepreneurs. And no, we’re not talking about the small strip of startups in Santa Monica known as “Silicon Beach”. We shouldn’t be comparing ourselves to Silicon Valley. Instead we’re focusing on the stretch of land from Santa Barbara to San Diego. We believe that it holds many of the characteristics shared by the other top student-startup-producing geographies. These characteristics are:

  1. Concentration of Top Universities
    Southern California has one of the strongest concentrations of top universities in the world like Caltech, UCLA, USC, UCSD, and UCI. Although rankings aren’t always the best metric, great universities do tend to attract sharp, highly-motivated students. Top liberal arts colleges like Pomona College and Harvey Mudd also span the region. This has created a large, diverse, and highly-qualified cluster of student entrepreneurship potential in SoCal.
  • Box (NYSE: BOX) was founded in 2005 at USC and is a cloud file sharing company. Its market cap sits at $3.1 billion as of August 2020.

These are just a few examples out of the thousands of companies that were started by SoCal students. If all this was done in the last fifteen years with limited resources, imagine what we can build in the next fifteen with the right resources and infrastructure.

Introducing California Crescent Fund

Our Mission
Our mission is to progress the rate of innovation and the access to capital across student startups, with a focus on Southern California.

How Student Entrepreneurship Currently Exists on Campuses
The current student startup ecosystems at universities are inefficient and fragmented. Campus initiatives like “new venture competitions” or “business plan contests” are operated top-down (faculty and administration driven) and not bottom-up (student driven).

This becomes a culture problem between the university faculty who run these programs and the student founders who participate in them. Simply put, incentives are misaligned, authentic connection is limited, and the generation gap is evident. In the startup world where good culture can be the driving force behind extraordinary success, the university ecosystem falls short.

We’re Doing It Differently
We are student-led and student-operated. Everything from sourcing, to check-writing, to advising is done by students. At the end of the day, we invest in student founders — nobody understands them better than other students like us.

Our approach is high-touch and connected. California Crescent Fund has student partners across 7 major Southern California universities: USC, UCLA, UCSB, UCSD, UCI, Caltech, and Harvey Mudd. Our student partners are the backbone of CCF and the experts of all startup activity at their respective campuses.

We have a small, fast growing team of talented individuals. Our partners include founders, product managers, software engineers, and consultants with previous roles at Google, Facebook, Coinbase, Cisco, Morgan Stanley, and more.

What’s Next for CCF?
Over the next several weeks, we’re going to bring on more student partners across our campuses, expand to additional SoCal universities, and kick off conversations with student founders for the 2020–2021 season.

We can’t wait to change the student startup landscape. Join us for the ride.

Are you a SoCal student interested in joining us? Apply for a role
Are you a student founder? Get in touch.
Inquiries & investor relations? Email: ops@californiacrescent.fund

Special shout out to Paige Finn Doherty, Gaby Goldberg, and Jessica Li for all their feedback on the article and continuous support.

Twitter: @CrescentFund | LinkedIn

California Crescent Fund

Investing in SoCal Students

Prerit Seth

Written by

Product at @Meraki, Venture at @CrescentFund | Enthusiastic about economics, strategy, ancient history, and chai.

California Crescent Fund

A student-run venture fund committed to growing the student startup ecosystem in Southern California.

Prerit Seth

Written by

Product at @Meraki, Venture at @CrescentFund | Enthusiastic about economics, strategy, ancient history, and chai.

California Crescent Fund

A student-run venture fund committed to growing the student startup ecosystem in Southern California.

Medium is an open platform where 170 million readers come to find insightful and dynamic thinking. Here, expert and undiscovered voices alike dive into the heart of any topic and bring new ideas to the surface. Learn more

Follow the writers, publications, and topics that matter to you, and you’ll see them on your homepage and in your inbox. Explore

If you have a story to tell, knowledge to share, or a perspective to offer — welcome home. It’s easy and free to post your thinking on any topic. Write on Medium

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store