Students can make great entrepreneurs, but VenturePact-founded by Penn students Randy Rayess and Pratham Mittal-is proving they can also be wise investors. The emerging firm is releasing its first class of startups.
A few months ago, First Round Capital launched student investors with The Dorm Room Fund (featured in a December issue of Flying Kite), entrusting $500,000 worth of capital to undergrads. VenturePact, on the other hand, didn’t begin with major cash. The group invests technical handiwork — building out the startup’s product — in exchange for a fee and partial equity.
Development can be outsourced, but it’s tough for non-techies to evaluate quality: A product riddled with bugs can still look great on a screen. VenturePact’s “partnership” model changes the incentives.
“Now that we have equity stakes, we want to build the best possible businesses,” explains Rayess. “We want to keep them and nurture them.”
VenturePact received over fifty applications at inception, but accepted only three: Accompliss, an app that helps hotels connect with guests; AirCare, a video-based professional coordination app tailored to the healthcare industry; and Boupp, an app that helps the fashion industry consult with customers on emerging trends.
The new platforms will be maintained by Penn students, who will receive school credit through VenturePact’s fellowship program. Rayess expects to eventually offer incubation services to startups, connecting them to mentors, publicists and venture capitalists, with hopes that in the future these stocks will be the kind that people pursue on live markets (click here for some examples).
VenturePact received a significant publicity boost in September 2012, when First Round Capital CEO Josh Kopelman tweeted about them. They’ve since connected with the venture arms of IBM and General Electric, who expressed interest in sending incubated companies their way.
Source: Randy Rayess, VenturePact
Writer: Dana Henry
