University of Michigan Social Venture Fund Comes Out of Stealth, Aims to Invest in Companies at the Nexus of Public and Private

9/27/10Follow @xconomy

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make technologies such as renewable energy scalable and cheap enough so that they can reach poorer populations. As an example, Kaul cited the work of social entrepreneur David Green—a University of Michigan School of Public Health alum who started an organization that makes medical treatments affordable to populations in developing countries.

Ultimately, Kaul’s team of students envisions Social Venture Fund as investing in companies globally, but for right now, it doesn’t need to look further than southeast Michigan to initiate its mission, he says. “Why go all over the world when you have issues right in your backyard?” he says.

Companies in the local sustainable agriculture sector near Detroit, for instance, will likely be investing targets of Social Venture Fund, Kaul says. The students behind the fund also look to do more than just give startups money, and will serve advisory roles in the companies the fund invests in.

Social Venture Fund has a targeted approach to fundraising, Kaul says. First, the team is looking to charitable foundations as early investors in the fund. And, Kaul says, he’s hoping that one foundation will provide the money for the entire first investment Social Venture Fund makes.

The fund is looking to close two to three deals per year, each worth up to $200,000, and is hoping to make its first investment by next spring, Kaul says. But the team is being ultra-careful about which company it selects for that first deal.

“I really want our first investment to truly satisfy us that it is something that we think is uniquely Michigan, that makes sense to people when they see it, and meets certain hurdles which other ventures may not,” he says. “It has to have social impact and a plan that can survive.”

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