Wharton Social Venture Fund teaches students to be investors

The Wharton Social Venture Fund is showing off Wharton’s social impact side — by becoming the largest student-run platform in the world for investing in socially minded companies.

A few weeks ago, the WSVF, which operates under the Wharton Social Impact Initiative, announced collaborations with Jerusalem-based crowd-funding platform OurCrowdand investment firm Locust Walk Impact Partners.

WSVF is composed of 36 students — primarily MBA students, along with three undergraduates — who are divided into six investment sectors. This is the first year that undergraduates have taken part.

Similar to a venture capital firm, students go through the entire investment process from start to finish. Each of the sectors researches companies and pitches them to the investment committee, which then conducts further screening of the companies.

The WSVF started eight years ago as a strategic consulting group. “We are now one of the most attractive organizations for students to join. 15 percent of first year MBAs went to info sessions and a bit under 10 percent applied,” Co-President and second year MBA Jayson Tischler said.

“At the WSVF we have a dual mission,” Co-President and second-year MBA Eddie Nie said. “To support the social impact community as a whole by providing investments to social entrepreneurs across the U.S. and the world and to provide our students with experiential learning in impact investing.”

“I’m always looking to get more involved in the social impact space,” Wharton and College junior Anderson Tien said. “I absolutely love it. I’m on the health care team with six to seven other MBAs and they treat me like an equal.”

Prior to the new collaborations, the WSVF got its funds from the MBA Impact Investing Network and Training competition — which it won the past 2 out of 3 years — in order to invest $50,000 in the company it had selected. After placing as a runner-up in MIINT last year, the WSVF was still able to invest in a company after receiving funds from an alumni investor.

Through OurCrowd and Locust Walk Impact Partners, WSVF will now be able to invest in between two and four companies per year, providing them with at least $250,000 each.

Nie said that the relationship with OurCrowd is beneficial. "A big part of the learning process is engaging with entrepreneurs and the people in the industry," he said. "When you actually have the capital, students can have a different conversation with entrepreneurs.”

Nie added that the WSVF had been looking to grow its presence in the social impact space, which it can now achieve with the additional capital brought about by the partnership.

The idea for the partnerships came from 1991 Wharton graduate and 1999 Wharton MBA graduate Robert Fioretti, who “thought that combing the efforts of the Wharton community and the WSVF with the capabilities and reach of a platform like OurCrowd is a perfect marriage.”

OurCrowd had been looking for new channel partners that would do the sourcing and due diligence on potential companies that it could present to its investor platform.

“We were looking for partners that are … really focused on social impact. The match with the WSVF was natural,” CTO at OurCrowd Gadi Mazor said.

Mazor emphasized how beneficial the partnership would be for the companies invested in by OurCrowd following pitches by the WSVF. “A platform like ours can significantly enlarge the sum [of money] to create a much larger impact for the social impact projects,” he said. “Collectively we have about 8,000 investors. Currently the OurCrowd [investing] rounds are never less than 1 million.”

Fioretti echoed the beneficial nature of the collaboration, adding that that, “the partnership is enhancing the experiences of the students who are working so hard on the WSVF initiative, just by further professionalizing a process that they had already done an incredible job of establishing.”

Senior Director of WSII Jacob Gray clarified in a statement that Wharton has no formal or legal partnership with either Locust Walk Impact Partners or OurCrowd.

“Wharton’s goal in working with these groups is to provide a world-class experiential education in impact investing,” he said. “We want every student in the Wharton Social Venture Fund to have the chance to source and [apply] due diligence on a real, live impact deal. And we found that the best way to do this was to work with real, live venture investors like Locust Walk Impact Partners, which has access to capital through OurCrowd.”

Both Nie and Tischler have “high hopes” for the partnership with OurCrowd, which they hope to deepen in the future.

Tien said that the new opportunities are amazing. “Everyone has something to give back to the community. [At Penn], I think it is our minds. It is a greater impact that comes from these types of projects — not just a small scale."

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