Reach Capital: Performance in Education Technology

By Maureen McNichols, Jaclyn Foroughi
2016 | Case No. SI136 | Length 16 pgs.

In January 2015, Jennifer Carolan, who had served as the managing director of the NewSchools Venture Fund Seed Fund (“Seed Fund”), spun off from the nonprofit venture philanthropy firm to create a for-profit social impact fund focused on education technology (edtech).  Through a unique joint venture with NewSchools Venture Fund (“NewSchools”) called NewSchools Capital, the new venture fund, Reach Capital, would allow Carolan to not only raise more funds and scale more effectively than it otherwise could have as a nonprofit, but also support portfolio companies as they matured. 

Having invested $9 million across 39 for-profit and 4 nonprofit companies for the Seed Fund, and with the support of such renowned anchor donors as the Michael & Susan Dell Foundation, the Bill & Melinda Gates Foundation, and the Sobrato Foundation, Carolan felt confident in Reach’s ability to invest successfully in scalable, high-growth edtech companies that prioritized social impact.  Still, Carolan was challenged with executing an efficacious spin off, establishing a compelling philanthropic value proposition, and finding a way to effectively measure performance focused on the double bottom line.

This case describes the challenges faced in the formation of a sustainable for-profit impact venture capital fund.  It covers the origin of the fund, a background of the education technology industry, fund terms, as well as a discussion of performance measurement.

Learning Objective

Provide students with an opportunity to understand the structure of an impact venture capital fund focused on the education technology market. Measures of social impact are introduced for further analysis.
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