Are you a Wharton student or an alum looking to raise money for a start-up?
The MBA Fund, a venture capital group started by current Wharton, Harvard, and Stanford MBA students, hosted its first schoolwide pitch competition last month. Student entrepreneurs from the three business schools applied, and 15 companies were awarded nearly $1 million in prizes.
“It was our first year running this contest,” said Sieva Kozinsky, MBA candidate in Wharton’s Class of 2020.
While MBAs are sometimes looked down on by entrepreneurs, Wharton has a history of graduates producing companies such as Warby Parker, Harry’s Razors, and Jet.com. Kozinsky added, “We’re seeing the rate of start-up creation expanding on campus, which is really exciting.”
Kozinsky and partners Hansae Catlett and Hiro Tien (both Stanford MBAs) and Josh Hoffman-Senn (Harvard) launched the MBA Fund last year. Their venture fund focuses on start-ups founded by Wharton, Stanford, and Harvard students and alumni.
“We started fund-raising in March of 2018, and our first investment was last fall. We’ve done about 20 total investments,” he said, declining to give total assets in the fund.
According to Kozinsky, "Over the past 10 years, the top three business schools have averaged one home-run start-up annually” — one with a valuation greater than $500 million. “As students in these schools, my partners and I will have a pole position to discover and nurture the next MBA monster hit,” he said.
The prize money comes from more than a dozen companies, such as NFX, Contour Ventures, and Bain Capital.
Here are MBA Fund contest winners from Wharton and the amounts they took home:
While this contest was student-led, Wharton hosts the Penn Wharton Entrepreneurship Start-up Showcase and several other competitions listed at https://entrepreneurship.wharton.upenn.edu/funding/.
Wharton’s third annual Start-up Showcase on May 3 judged nearly 30 student-founded start-ups from across Penn and Wharton. The finalists pitched for $135,000 in cash and prizes, and included:
#PeriodPainFree: Personalized plant-based healing formulas for women who experience period pain.
FLOAT/THERE: Curated rental apparel delivered directly to a traveler’s destination,
Fuego Shoes: Dance shoes with a custom-developed sole made to go from the street to the dance floor,
Halo: LED monitors on top of Uber/Lyft vehicles that display location-targeted ads,
Elivade: Career advancement platform to connect people of color with peers, mentors, and employers,
Do MBAs make good entrepreneurs? Data are mixed. Networking is probably a super-helpful factor. In 2015, Wharton MBA grad Joseph Zwillinger cofounded Allbirds, a California maker of environmentally friendly footwear. Two of his former classmates, Jeff Raider and Dave Gilboa, who cofounded Warby Parker, invested in Allbirds and introduced Zwillinger to other investors.
“These relationships we create at business school are deep bonds to explore big ideas,” Zwillinger told the Financial Times. “Some of my best friends come from business school, and they are all unbelievable resources who invest in each other’s success.”
Best interest vs. fiduciary
Confused about the SEC’s new rules requiring advisers to recommend financial products that are in the best interest of their clients — Regulation Best Interest? You may want to tune in to a webinar on Monday to figure it out.
Fiduciary experts Marie Swift, Allan Slider, and Knut Rostad will discuss “Differentiation for RIAs in a Reg BI World” from 2 to 3 p.m. If you’d like to listen in, here’s the link online: https://register.gotowebinar.com/register/4272483782046579725.
Regulators’ new rules about what duties brokers and financial advisers owe their customers are called “Reg BI.” The regulations are somewhat watered down, according to Rostad, founder of the Fiduciary Institute.
“Wall Street claims Reg BI is a higher standard than investment advisers’ fiduciary standard,” said Rostad, who has long advocated for a stronger distinction between fiduciaries, such as registered investment advisers, and Wall Street brokers.
“Wall Street ad campaigns will saturate the airwaves, promising that the best-interest standard is pro-consumer. Investor and fiduciary advocates, researchers, and state securities administrators fervently disagree with this sales talk and flatly oppose the rule,” he added.