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March 20, 2023 Startups, Technology & Innovation

UConn student-led venture fund bets on sustainability, insurtech, edtech startups

HBJ PHOTO | STEVE LASCHEVER Business students who particpate in UConn’s Hillside Ventures program include (sitting, from left) Dhanush Kotumraju, Maya Fox, Aria Penna and (standing right) Joseph Roberts. John Elliott (standing right) is the dean of the UConn School of Business.

When Aria Penna enrolled at UConn as a finance major she was eager to begin her coursework, but also knew she wanted to get more out of college life than just books and lectures.

So she signed up for a relatively new program called Hillside Ventures, a student-led venture fund that invests in early-stage startups.

She’s one of six women in the 31-student program.

“I was craving an environment where I could be with other students who were passionate about business, because I was passionate about business,” said Penna, a 19-year-old sophomore. “We are working with companies in a real-world setting.”

The UConn School of Business rolled out Hillside Ventures in the fall of 2020, joining a growing number of U.S. colleges that have student-led venture funds, which provide undergraduates real-world startup investment experience. Such programs also allow colleges to burnish their entrepreneurship and innovation reputations.

That’s been a major focus at UConn, which launched the Werth Institute for Entrepreneurship and Innovation following a $22.5-million gift in 2017 from Woodbridge businessman Peter J. Werth, founder of generic drug development and supply company ChemWerth Inc.

Hillside Ventures is backed by $1.1 million in philanthropic support, and the school will be looking to raise additional money for the program by the end of the year.

A recent $8-million gift to the UConn School of Business from former Republican state Sen. Toni Boucher, a 2002 UConn graduate, and her late husband Henry Boucher, will help continue and expand the program.

The money is used for a variety of purposes, including faculty and administrative costs and startup investments.

Since its inception, Hillside Ventures has bet $225,000 on 10 startups, including Goodwipes, an Atlanta-based company that makes biodegradable flushable wipes, and Natrion, an Illinois-based company that creates a flame-retardant battery and is also backed by well-known entrepreneur Mark Cuban.

John Elliott, dean of the UConn School of Business, said the school has focused on developing entrepreneurship programs, including a student-led investment fund founded in 2000 that allows teams to manage $1-million investment portfolios.

The idea for Hillside Ventures, Elliott said, came from students, and faculty helped by raising money.

“We reached out to our alumni who told us they loved the passion of the students and they thought it was a great idea,” Elliott said. “Within six months, we raised more than $1 million (from 25 alumni).”

How the program works

College venture funds aren’t new. Schools like Michigan and Wisconsin launched theirs in the 1990s.

But more universities have announced new student-led venture programs in recent years, including the University of Nebraska-Lincoln and Emory University.

Hillside Ventures is overseen by UConn business school professor Greg Reilly, also head of the newly renamed Boucher Management & Entrepreneurship department.

The program aims to educate students about the venture investment process via a hands-on approach; participants write business proposals and personally meet with startup founders.

Students pitch investment opportunities to a six-member board — comprised of UConn alumni, faculty and business leaders — and ultimately to the UConn Foundation, which allocates the money.

Once approved, the group can invest upwards of $25,000 in a single startup. Students focus on companies either founded by UConn alumni, or that are in the sustainability, insurtech or edtech industries.

“These students walk the walk and talk the talk in learning from this experiential program,” Elliott said. “They go to these companies and go through the exact steps that a professional private investor would go through to invest in a company.”

Penna, who estimates she devotes about 15 hours weekly to the program, said students often find out about potential startups by attending regional conferences where early-stage companies pitch to investors.

After getting to know companies and their leaders, students analyze startups and create a “one-pager” report that details the company’s future earnings potential.

If a company is suitable for investment, students will pitch the oversight investment board and UConn Foundation for approval.

Hillside Ventures has a student portfolio manager — Matthew Aristy — who provides quarterly updates on portfolio companies. In addition, students will periodically meet in person or virtually with startup management teams for check-ins.

Startups could potentially receive a second round of investment, Penna said.

One Connecticut company that has received funding is Stamford-based LessonBee, which provides online health-education courses for schools and parents.

Comfort zone

UConn junior Dhanush Kotumraju, 20, is a member of Hillside Ventures.

The finance major said he’s been able to grow and step out of his comfort zone by participating in the program.

“Coming into this, I was a little bit more introverted,” Kotumraju said. “I wasn’t comfortable hopping on a phone call and having a conversation with (a startup). But, through Hillside Ventures, I’ve really developed that skill.”

Kotumraju said the program has also taught him a key trait to successful venture investment: “Always be skeptical.”

“The (investment) board has taught us to check everything and get multiple opinions before making decisions and not to believe someone blindly,” he said.

Reilly, the business school professor, said UConn graduates who have participated in Hillside Ventures have gone on to get investment banking and venture capital jobs in New York City, Chicago and Boston.

“Students are uniquely motivated to engage deeply in the class because they value the authenticity of the tasks they are doing, have a sense of control over their learning, and have support from fellow students, faculty and outside experts,” Reilly said.

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