The NewSchools Venture Fund’s nonprofit seed fund, which has channeled millions of dollars from philanthropies into a variety of projects across education, will wind down its operations and a new, for-profit operation will take its place.
The new seed fund will operate as a separate legal entity from the NewSchools Venture Fund, though the two organizations will still have an affiliation—the exact parameters of which have yet to be determined, said Stacey Childress, the chief executive officer of the NSVF, based in Oakland, Calif.
To date, NSVF’s nonprofit seed fund has raised money from philanthropic sources, and made investments in mostly commercial, but also nonprofit entities in ed-tech and other areas.
One of the biggest factors driving creation of the new, for-profit seed fund is that it will be able to raise money from a broad range of “mission-driven” private individuals and organizations that are also seeking returns, said Childress.
“It’s a different pool of potential investors,” Childress said in an interview. “It does open up the potential for a much larger fund.”
Jennifer Carolan, the managing director and co-founder of the existing, nonprofit seed fund will move out of that role and leave the NSFV on Jan. 30. Carolan will begin working on the creation of the new investment entity.
“Since we launched the seed fund three years ago, NewSchools has been among the most active ed-tech investors, having funded more than 40 high-impact entrepreneurs whose innovative ideas have reached more than 60 million students,” Carolan said in a statement.
“It’s an exciting time in education technology. I look forward to developing the most effective way to build upon that success.”
Childress said that NewSchools officials had been planning to make the change for some time, and word was beginning to get out, so the organization decided to make the move official. The new fund is not yet talking with potential investors, in part because so many of the legal and operational details of the changeover have yet to be finalized, she said.
Over the past few years, venture capitalists have poured billions of dollars into the education space, with a substantial portion of that money flowing into K-12 technology.
Those investments, and the array of digital systems and tools born of them, have been a source of both hope and frustration for many school officials and educators.
Districts leaders are weighing the benefits of costly and complex tech projects, and are often uncertain how to judge the quality of systems and tools flooding the market. They’re also juggling other concerns, such as how easily technology can be integrated into classroom lessons by teachers, and whether various tools will put students’ privacy at risk.