So You Want to Be a Student Investor?
6 opportunities to explore venture capital as an undergraduate.
Nearly every week I receive some variation of the same message via LinkedIn, “I’m interested in venture capital. How can I explore it while in college?” Halfway through our early morning conversation, one current college student asked me if I had ever written down my thoughts on the matter. I hadn’t. This is my first attempt to do so.
What’s the deal with VC?
It is well known that the venture capital industry is difficult to break into. Generally speaking, there are far fewer opportunities to work in venture investing immediately following graduation than there are in other areas of finance, such as banking. Venture capital firms are smaller, and this is reflected in their relatively limited hiring needs. Prior investing experience is certainly not required to be a compelling candidate for full-time positions, but it can be helpful.
A number of programs are designed to provide students with exposure to the venture capital industry. To my surprise, many of the individuals who reached out to me for advice were unaware that the fellowships existed or that they were eligible. Accordingly, I have chosen to highlight 6 different student investing opportunities throughout the United States.
Before we begin, it’s worth noting what this list does and does not include.
- These fellowships are specific to venture investing and are distinct from programs which focus on the stock market or other asset classes.
- These programs are not college or university specific.
- These are term-time positions, rather than summer ones.
- MBA students are also eligible for many of these programs, but there are other opportunities exclusively available to MBA students.
- All of these programs have open applications. If I was unable to find an application then I did not include the fellowship in this list.
Note: I have spoken to at least one current or former participant in each of these programs. In many cases, I consulted multiple people. I used these insights to supplement publicly available information.
1+2) Rough Draft Ventures and Dorm Room Fund
I have chosen to group these two programs together given their similarities. Both “RDV” and “DRF” were established in 2012 and have each invested in upwards of 150 companies since their inception. Students are tasked with sourcing companies, completing diligence, and making funding decisions. Neither of the initiatives are freestanding; they are both funded by larger entities. RDV is supported by General Catalyst, while DRF is backed by First Round Capital. Dorm Room Fund grants $20,000 checks and Rough Draft opts for $25,000. In both cases the investment takes the form of a SAFE, which is largely considered to be the most founder friendly type of early investment. These relatively small check sizes mean that students can expect to see their deals materialize quickly.
Update (9/12): RDV announced that they will be expanding to the Midwest, Mid-Atlantic, South, and the Pacific Northwest.
Both programs recruit student investors who attend universities in and around Boston, New York, Philadelphia, and San Francisco. Despite similar regional focuses, the number of students they enlist differs. As of August, RDV listed 24 fellows on their website, while DRF named 58. In summary, both RDV and DRF have been going strong for nearly a decade. These two well established programs deploy a high volume of small investments.
DRF application due September 22
RDV application<— use this one. The link on their site is broken.* The article states that the deadline is September 18, but the application itself says September 14.
3) Contrary
Contrary, launched in 2016, differs from RDV and DRF in a number of ways. Firstly, they are their own venture fund, rather than a program run by one; they raise their own independent capital. This distinction alone might not matter much for those seeking investment, but it has real consequences for their student partners. Due to the fact that undergraduate involvement is central, rather than auxiliary, Contrary leadership is able to dedicate a great deal of time to educating and mentoring students. This differentiating factor surfaced in nearly every conversation I had with current and former Contrary partners.
Contrary partners collectively source a large number of prospects, but only a select few ultimately result in investments. Funding a smaller number of companies allows for more comprehensive diligence than would be possible on a larger scale. Additionally, this focus enables the team to deploy more capital with each investment. A single investment made by Contrary can reach up to $500,000. This means that most participants can expect to spend their entire college career at Contrary and never get their own deal closed. However, those who successfully source and close a deal personally receive a small piece of equity. While Contrary makes fewer investments than their rival programs, it works with students from a record number of universities. Notably, it provides one of the only opportunities open to individuals who attend school in the midwest.
Contrary application due September 12
4) Pear VC Fellows
Pear VC wants to find potential before anyone else does. The Palo Alto based early stage venture firm boasts an impressive track record. Despite this, almost none of the students I spoke with were aware that they led an initiative for students. Pear’s fellowship program information is hidden under a nondescript hamburger menu on their website.
There are a number of differences between Pear and other venture capital focused fellowships. Pear fellows do not have control over any distinct capital; they serve in an advisory capacity. Students are asked to report on startup trends and offer input on firm deal flow, but there is no avenue for them to make investment decisions. A deal sourced by a Pear fellow could theoretically materialize into an investment, but that is not the stated goal of the program. Pear began on the west coast and has since expanded to include UC Berkeley, Harvard, MIT, Penn, and Stanford. Pear is less structured than RDV, DRF, and Contrary, and the time commitment is lighter.
Given these factors, the opportunity may be particularly advantageous for students seeking to gain exposure to a real VC environment, rather than one simulated for students. Lastly, Pear fellows receive a modest stipend for their work. This is, unfortunately, an anomaly (more on that later).
Pear application due September 12th for Penn and September 15th for others
Eric Yuan was denied a U.S. Visa 8 times. He would later gain entry to the United States and found a company called Zoom. His story is not unique, but it should be. Unshackled Ventures is an early stage venture fund focused on investing in immigrant founders. The firm itself was founded in 2014, and the fellowship program is entering its third year. Anyone in the latter half of their educational career can apply. Fellows can be located anywhere in the world, provided they are able to participate in mandatory calls no matter their time zone.
The fellowship is centered around the activities of the fund itself, rather than venture investing more generally. Fellows work with Unshackled’s existing deal flow; they are not responsible for sourcing their own companies. While the opportunity is not limited to students who are immigrants, individuals who identify as such are particularly encouraged to apply.
Unshackled application due September 10, 12 pm PST
This deadline was not posted on the application-I found it on a related article. I suspect they might end up extending the deadline given the ambiguity.
6) HBCUvc
Venture capital has a diversity problem. Less than 3% of venture capital decision makers are Black. The goal of HBCUvc’s yearlong program is to develop the investing skills of Black and Latinx college students. Individuals from any participating college who have completed their first year of college can apply. Given that many programs enlist students from overlapping lists of universities, HBCUvc is positioned to access an enormous wealth of untapped talent.
The first year of HBCUvc consists of training and leadership development. Exceptional participants are invited to return for a second year to manage the VC fund and support its investments. I could locate little information surrounding the investment process or assets under management. What is clear, however, is that HBCUvc is poised to shape the future of the industry.
HBCUvc application due September 26th
Room for Improvement
While participating in one of these elite programs can be incredibly transformative, the selection process is not without its faults. Referrals play a large part in nearly all of the recruiting processes; candidates who can be vouched for by current or former participants have an immediate advantage. In this way, the programs which build aspiring venture capitalists can be exclusionary in the same way as the industry at large.
Even if one is admitted into a program, this does not necessarily mean that they will be able to participate. All but one of the fellowships I listed do not pay their participants. While there are surely perks, such as coffee budgets and lots of swag, stipends are rare. Many universities require that students on financial aid contribute a certain amount toward their education in order to remain enrolled. Students who have to fulfill financial obligations may effectively be disqualified as a result.
Given the number of students willing to work for free, some may argue that there is no clear incentive for firms to pay their fellows. However, venture capital firms are generally not short on capital. If cost is an issue, then perhaps stipends could be rationed based on term time work expectations or financial aid percentages.
While the structures of the programs may not change overnight, my hope is that the number of students exposed to the opportunities does.
Applications by due date:
Unshackled application due September 10, 12 pm PST
Contrary application due September 12
Pear application due September 12th for Penn and September 15th for others
RDV application< — use this one. The link on their site is broken.* The article states that the deadline is September 18, but the application itself says September 18.
DRF application due September 22
HBCUvc application due September 26th
All ad revenue generated from the article will be distributed equally to BLCK VC, Black Girls Code, Black Innovation Alliance, MLT, and Black Girl Ventures in support of racial equity in entrepreneurship. This is in partnership with the greater Amplify initiative.
