What if all schools were tech investors?

It’s no coincidence that the school that banked millions this week by investing early in Snapchat is in the middle of Mountain View, California.

the parents of your students are some of the world’s wealthiest
technology investors then, well, it’s smart to make the most of it.

Francis High School’s incredible windfall wasn’t a fluke – it was the
result of a patient process which began in 1990, when it set up a
development fund to raise cash for the school. The fund has been
bankrolled by parents and alumni who know their stuff – particularly
when it comes to making bets on technology stock.
At $17,000 a
year for tuition, the school isn’t exactly strapped for cash. Its
campus, where I spent Friday morning, is leafy, green and well-equipped
outside and in. The 1,760 students that come here are lucky, privileged,
and most likely on their way to great things.
The development
fund was set up to, among other things, provide money for scholarships
that are offered out to kids from less well-off families in the area.
And with the Snap deal, the fund has swollen to phenomenal new heights –
$24m so far, with many more millions set to come. All from a $15,000
It made me wonder – why doesn’t this kind of thing
happen more often? $15,000 is small change to the budgets of venture
capital firms around the world, particularly in Silicon Valley where
$25bn was invested in tech companies in 2016 – an apparently “bad” year.

Deal breakers

schools can’t afford to put together a fund like Saint Francis. But
then, why should they need to? What if investment firms allowed a small
slice of the money they invest to be kept by for schools, charities or
other needy causes so that if and when the ship comes in, it’s life
changing for the many rather than the few?
“I think in Silicon
Valley especially, or places with a lot of entrepreneurship, I think
it’s great for investors to reach out to local institutions and schools
and see if they can include them in some of their deals,” said Barry
Eggers, founding partner at Lightspeed Venture Partners, the firm that
led Snap’s first investment round. This week that investment became
worth more than a billion dollars.

Saint Francis High Schoool

Image caption

The school set up a development fund in 1990

It was Mr Eggers’ idea to involve Saint Francis in
the deal five years ago, based on the enthusiasm of his children, who
loved Snapchat.
“They were sitting around the kitchen table one
day and they were all on their cellphones laughing. They said ‘Dad, have
you seen this app, Snapchat?’
“My daughter said ‘I used to use it five times a day, now I use it 30 times a day!’.”
He sees no reason why the success at Saint Francis can’t be emulated at other schools – but it won’t happen easily.
institutions have to have a programme. It can’t be a one-off, that’s
not going to work. They have to commit to doing this.”
His point
is it takes time and money, and it’s about playing the numbers. Schools
won’t be able to just invest $15,000, sit back for a few years and see
the success roll in. There will be vastly more misses than hits.

Prediction model students

Saint Francis, as school president Simon Chiu was fielding questions
from the nation’s media, the music of Bruno Mars soundtracked a dancing
competition, an event held as part of a week of activities designed to
de-stress students.
The school didn’t want us disrupting the day,
or the dance-off, so we weren’t able to get the view of the kids in what
right now is America’s most talked about school.
That’s a shame,
as the future of Snapchat rests in high schools like this one across the
country, and eventually – if the app can grow as investors hope – the
entire world.
But only if it remains “cool”. Just as Mr Eggers’
daughter was the early-adopter that predicted Snap’s success, the
students that are studying at the school nowadays would be the harshest
critics of whether or not it will succeed. Maybe they’ve already moved
onto the next big thing.

Snap logo

Image copyright
Getty Images

“Certainly we know that kids are the first people to figure out what’s hot and what’s new and what’s desirable,” said Mr Chiu.
He too hopes the school’s success will lead other venture capital firms to work in the same way.
“I think this is an amazing way for venture capital folks, or companies, to share these experiences with schools.
“I would hope that companies would look at this as an example of something they can do to help their local community.”
more tax would be a better way, of course, but that’s a debate for
another day. For now, Silicon Valley is basking in the enjoyment of a
huge success that will trickle down into the tech start-up ecosystem,
meaning more money for new companies.
A success like Snap is rare.
But deals happen here every day – acquisitions and exits that have
created a new breed of super rich.
As California’s newest
billionaires celebrate this weekend, perhaps we should imagine the
impact if every big deal held aside just a few thousand dollars at the
beginning for a good cause. It would allow the needy causes to
accumulate real wealth. Now that would be truly disruptive, wouldn’t it?

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