UNL launches its own student-led venture capital fund | Local business news

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Many start-up companies founded by University of Nebraska-Lincoln students and alumni have achieved tremendous success.

Think Hudl or opendorse or Virtual Incision.

But could they have grown faster or bigger if they had had earlier access to capital?

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After Emily Kist interned with Nelnet and the Nebraska Angels in 2020, she asked herself a similar question. Could the university do something not only to help these start-ups, but also to give students more opportunities on campus to learn about venture capital investing?

After her internship ended, Kist set to work answering that question.

The finance major began talking to university officials, community members and others to see if they would support the idea, “and I got a lot of yeses,” he said. she stated.

Kist also met another UNL student, Adam Folsom, who had the same idea.

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At the same time, someone else on campus was working on a similar concept.

Joe Petsick, who co-founded the Omaha-based online auction company Proxibid, had been hired a few years ago as an entrepreneur-in-residence at UNL.

He said a big part of his job is to look at the College of Business through an entrepreneurial lens and look for ways to better connect the Center for Entrepreneurship to the startup and business communities at large.

One of the areas he immediately identified where he thought the university could have a greater impact was in venture capital investing.

“Probably one of the biggest complaints you’ll hear about our ecosystem has to do with the lack of available capital,” Petsick said.

Although things have improved over the past few years in terms of the money available at the seed capital stage and later, there is still a gap when it comes to seed capital.

Petsick said he realized that a UNL venture capital fund could solve two problems. This would provide much-needed capital to start-up companies that might not otherwise have access to it, and it would provide more opportunities for students to learn how the venture capital process works.

And it would also put UNL on a par with the hundreds of other universities that have venture capital funds or formal programs, including the University of Nebraska at Omaha and most Big Ten schools. .

As he progressed through the process, he learned about Kist and Folsom and their similar endeavors.

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Petsick said he eventually pitched the idea to Kathy Farrell, dean of the College of Business, “and she immediately agreed that it was a good idea and we should try to pursue it.”

He said the decision was made to create an “evergreen” fund, which basically means that all profits go back into the fund to be used for future investments.

Petsick said he then got in touch with Invest Nebraska, which is a public-private partnership that invests in start-up businesses in the state.

Ben Williamson, director and general counsel of Invest Nebraska, said this isn’t the first time he’s presented a proposal for a student venture capital fund.

“It would come back every once in a while and for some reason it never got traction,” Williamson said. But the idea seemed more grounded this time around, largely because “the startup ecosystem is in a more mature place.”

Williamson said he told the organizers that if they could raise funds and get the necessary buy-in from the university and the startup community, then Invest Nebraska would be willing to act as a sort of sponsor, providing monitoring and advising students on things like how to structure deals.

The Husker Venture Fund was officially launched last fall with nearly $1 million in capital raised from companies and individuals, many of them alumni of the university. More than two dozen students have been chosen to participate in the inaugural version of the fund.

Its objective is to focus on companies affiliated with the UNL, with priority given to companies founded by students.

Last month, the fund made its first-ever investment, $25,000 in Sentinel Fertigation, a company created by Jackson Stansell, who is pursuing a doctorate in biological engineering at UNL.

Stansell, whose company uses the technology to make nitrogen fertilization more efficient, said he was impressed with the verification process he had to go through.

“They asked some of the best questions I’ve received throughout my investing or fundraising process,” he said.

Williamson said he was pleasantly surprised by the professional work done by the students. He was prepared to have to do a lot of hand in hand, but that didn’t happen.

“Honestly, Adam and Emily did all the hard work, and we just tried to support them along the way,” Williamson said.

Kist, who is one of the fund’s managing directors along with Folsom and Keith Nordling, said the fund’s goal is to provide four $25,000 investments per academic year, and while he likely won’t achieve that goal this year, he is looking to finalize a few more deals before the end of the semester.

Kist said that while it would be nice to fund a company that turns out to be as successful as Hudl, students and their advisors understand that what they are doing is an early-stage investment and that they can have more. failures than successes.

“It’s really fun supporting founders and helping them get to that next stage of growth, and so we kind of have that mindset when we go into every investment,” she said.

Contact the writer at 402-473-2647 or [email protected]

On Twitter @LincolnBizBuzz.

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