I grew up watching Shark Tank. So my introduction to investing came from people like Mr. Wonderful who:
acted ruthlessly.
wore fancy suits.
valued money over mission. Always.
The Sharks have partnered with edtech companies from Brightwheel and Hopscotch to Scholly. But edtech segments on the show are few and far between.
If only there was a way to hear about investments from this sector. All the time.
I dug into some of the top education venture capital firms including:
Owl Ventures, the largest VC fund in the world focused exclusively on edtech
GSV Ventures, for Pre-K to Gray digital education and the skills market
Learn Capital, exclusively funding entrepreneurs with visions for better and smarter learning
Reach Capital, home to one of the most diverse venture capital teams in the United States
See how my opinion of what's important in (edtech) venture capital has evolved over time. Here are some common items VC's in this sector are looking for.
A balance of a strong mission backed by a financial plan
Trusted by teachers, committed to founders. Together shaping the future of education and work. - Reach Capital
I believe edtech products are designed to improve the quality of education kids get.
I believe edtech business is meant to improve quality education AND receive returns on this investment.
Across the 4 venture capital firms I checked out, finances are of course critical to the bottom line. But so is having a legitimate mission behind the numbers.
Education outcomes must be measurable
We provide capital and capabilities to help gifted entrepreneurs scale and accelerate human-centric companies. One mission, hailing from all walks of life. - Learn Capital
Founders Elizabeth Holmes and Adam Neumann proved that eccentric thinkers with the right amount of zeal or charisma can keep investor money flowing—with fleeting or nonexisting results.
The work of the 4 edtech firms contradicted this.
Owl Ventures, for example, creates a yearly education outcomes report made up of a high-level overview of the state of the industry, plus this firm's specific approach for measuring edtech company outcomes:
scale and access
diversity
outcomes specifics
Diversity matters on VC teams and their portfolio companies
We’re proud to partner with companies that ensure that the products they are building have the ability to serve a diverse set of learners and educators. - Owl Ventures
I figured diversity would be a cherry on top stat in the minds of VCs weighing whether or not to give a promising idea millions, or even billions of dollars.
It turns out that VCs value diversity in edtech among their own teams, as well as the portfolio teams they manage.
Reach Capital, for example, has one of the most diverse venture capital teams in the United States, made up of teachers, parents, entrepreneurs, and investors.
Diversity is also sought out in company teams and the students being impacted by their edtech. Owl Ventures manages both by measuring their companies' employee diversity AND the learner profiles that they serve.
Established edtech companies. They get funded too
Proud to partner with the world’s most important, iconic EdTech companies & their visionary leaders, spanning the “Pre-K to Gray” digital learning landscape. - GSV Ventures
Backing the most beloved brands in education. -Reach Capital
I'm used to imagining the scrappiest, hungriest companies as the ones looking for investments. And they are...
...but across the 4 edtech venture firms that I researched, even companies that have been around for as long as the year 2000 are getting investments too.
Conclusion: Marry the mission to the money