U-M’s Social Venture Fund Makes Second Investment this Year
Student-led fund participates in $225,000 investment round for sustainable start-up Jack & Jake's
ANN ARBOR — The Samuel Zell & Robert H. Lurie Institute for Entrepreneurial Studies at the University of Michigan's Stephen M. Ross School of Business announced today its Social Venture Fund has closed an investment in Jack & Jake's, a sustainable food provider based in Louisiana.
The Social Venture Fund participated in this investment round which totaled $225,000 alongside lead and prior investor, Keller Enterprises, as well as angel investors and Amcref Community Capital, a New Orleans organization that provides community development financing.
This marks the second investment ever made by a socially-oriented student-led venture fund. The Fund's first investment was made in April of this year as part of LearnZillion's series A round.
Jack & Jake's is building a new local food system in the New Orleans area to reconnect farmers and fishers with those who need access to fresh, healthy foods. Led by founder and CEO John Burns, Jack & Jake's is helping to catalyze the economy and support multiple communities within Louisiana by extending the distribution and sales capabilities of local farmers and fishers, and bringing fresh food options to areas that wouldn't otherwise have them.
"The Social Venture Fund is helping us connect two groups who need each other: farms and fisheries and community institutions such as elementary schools, hospitals and assisted care facilities," Burns stated. "Students in the Social Venture Fund have created a set of social metrics against which we can measure the impact of the investment – not just the financial return, but more importantly the degree to which the investment is improving the community and the environment."
A team of seven students led by Sanjay Vachani (MBA '12) and Emily Rinner (MBA '12) sourced the deal through the Social Venture Fund's national call for business plans in 2011. While working with Burns, the team saw first-hand how growth plans for Jack & Jake's were taking shape and contributed to great momentum for the business. As a result, the time was right to join this latest investment round and provide Jack & Jake's with additional support.
"The recent deal with Jack & Jake's provided another opportunity for our students to experience the complexities of double bottom line ventures – balancing social need with a positive return on investment," stated Tom Kinnear, executive director of the Zell Lurie Institute. The Zell Lurie Institute's three student-led investment funds - Wolverine Venture Fund, Frankel Commercialization Fund, and Social Venture Fund - provide practical, hands-on experiences of investing real money in classical, early stage, and social arenas, respectively. The three funds together engage over 80 graduate students.
"Our goal as a fund is to support entrepreneurs in the social space and find organizations and leaders who need our support," stated Gautam Kaul, Professor of Finance at the Ross School of Business and managing director of the Social Venture Fund. "In this case, our student team did a great job cultivating a relationship and I am confident that both Jack & Jake's and our Social Venture Fund students will learn a tremendous amount and realize significant value from the business relationship."
The Social Venture Fund seeks to make early-stage investments of up to $200,000 in sustainable, innovative, for-profit organizations that deliver financial returns and place the generation of a significant social impact at the heart of their mission.
"This is so much more than an investment," Rinner stated. "We've had the rare opportunity as MBA students to learn first-hand about early stage investing in socially and environmentally responsible companies. Navigating complicated and sensitive issues like market sizing and valuation, while also strategizing ways to help Jack & Jake's continue on its growth trajectory, has pushed all of us to learn and work in ways we'd never be able to in the classroom setting."
For more information, visit the Institute at www.zli.bus.umich.edu.