MBA-Managed Garber VC Fund Exits One Investment, Ups Another
The Garber Venture Capital Fund, an early stage venture investment fund managed by MBA students at the Penn State Smeal College of Business, recently sold its stock in one company and upped its investment in another.
The Garber Fund is part of the Nittany Lion Venture Capital Association (NLVC), an MBA student-run management group that works with small companies and other investment groups in early stage business planning, execution, and due-diligence assignments. Used within a course environment, the fund allows Smeal MBA students to experience firsthand all aspects of venture capital investment.
In January, the fund sold its shares of HireVue, Inc., a leading provider of Internet-based video interviewing services used in executive recruitment. The Garber Fund earned a profit of about $15,000 on the $150,000 it invested in HireVue in a Series "A" Round of Preferred Stock in May 2009.
This month, the fund committed an additional $50,000 to Healthy Humans LLC, a provider of e-health portals for patients and doctors to improve health outcomes and lower costs, in which the fund originally invested in 2010. This second tranche investment in Healthy Humans was agreed upon based on milestones reached by the company. The fund's initial investment in Healthy Humans was $150,000.
"Both of these recent moves by the Garber Fund are indicative of the strength of its investments," says David Lipson, director of Smeal's Garber Venture Capital Center, which oversees the fund. "Times are tough right now for VC funds, so earning a 10 percent profit in about 18 months is no mean feat for our MBA students. Add to that the success of Healthy Humans, which has caused us to increase our commitment, and it becomes apparent that the Garber Fund is in great hands under the leadership of our students."
Smeal alumnus John Garber and his wife, Bette, established the Garber fund in 1999 with a $5 million commitment to bring reality to the teaching of entrepreneurship and venture capital at Smeal. At the end of 2010, the Garbers fulfilled another $1.5 million of their original pledge, giving the fund more capital to invest in early stage ventures.
Since July 2002, the Fund has made seven investments and currently has two other active investments in addition to Healthy Humans: Diamond Back Truck Accessories, a manufacturer and distributor of pick-up truck covers and other truck accessories, and INDIGO Biosciences, which has developed a unique method to cryogenically preserve nuclear receptor cells. Initial investments from the fund have been between $100,000 and $325,000 and have been in the form of convertible debt or preferred stock.
For more information on Nittany Lion Venture Capital or the Penn State Entrepreneurs Network, contact David Lipson at 814-865-0195.