SMVF Gary Travis (left), a Krannert MBA student, Thomas Grimes (right), a graduate student in the School of Nuclear Engineering, and eight other students participated in the Krannert School of Management's "Student Managed Venture Fund" course. (Photo by Purdue Research Foundation)

Ventured Gains

Student-managed fund aids innovative startups

The Krannert School’s reputation for producing graduates with a unique combination of business expertise and technical and analytical skills that allow them to make data-driven decisions is benefiting not only students but also entrepreneurs.

Management students as well as those from other Purdue colleges and schools are acquiring real-world business experience by performing due diligence on startups that apply for financial support from the Emerging Innovations Fund, an evergreen fund created to accelerate the commercialization of early-stage innovations.

The Student Managed Venture Fund course challenges students to complete reports on startups founded on Purdue innovations or based in Purdue Research Park. The 10 students in a recently completed course executed due diligence on 12 startups seeking support for the 2015 round of funding.

"My biggest takeaway was that I learned what it is like to study a company from the perspective of an investor or venture capitalist, and that experience was invaluable," says Gary Travis, a Krannert MBA student who helps teach the capstone course for Purdue's Certificate in Entrepreneurship and Innovation program. "The process also demonstrated to me all the different criteria that an entrepreneur needs to consider. Then our team compiled the information and wrote a 30-page report and presented that report before a committee."

The reports filed by Travis and other students in the class included a research profile of each startup that demonstrates an understanding of the feasibility of the startup's product or service, budget, IP protection, licensing options, marketing targets, competitor analysis and financial projections.

"This course gives students opportunities for real-world experiences that integrate what they have learned in the classroom such as management concepts and principles with actual commercialization activities," says Richard Cosier, Purdue’s Leeds Professor of Management and dean emeritus of the Krannert School. "It's an effective program. Over the past four years, more than $800,000 from the Emerging Innovations Fund has been invested in startups reviewed by students in the Student Managed Venture Fund course."

Companies that previously received funding from the Emerging Innovations Fund include bioVidria Inc., Matrix-Bio Inc., Medtric LLC, Microfluidic Innovations, Spensa Technologies Inc., Telos Discovery Systems and Tymora Analytical Operations LLC. The course is supported through a partnership with the Krannert School, the Burton D. Morgan Center for Entrepreneurship and the Purdue Research Foundation.

"Determining what companies will receive support through the Emerging Innovations Fund involves several qualifying factors including product development, market feasibility, company leadership and funding potential," says Jon Gortat, a Krannert alumnus and senior project manager in the Purdue Research Foundation Office of Technology Commercialization. "Having Purdue students complete due diligence on startups not only provides them with an experiential learning opportunity, but they perform a real service for the startups as well."

Travis and one of his team members, Thomas Grimes, executed due diligence on SensorHound, a startup that is commercializing software to protect the "Internet of Things." This technology could reduce the development and operational costs for large networked sensor systems such as smart grids.

"I learned so much. SensorHound's target customers represent a large, competitive market because their technology addresses the needs of several different industries. I was impressed with the company's depth of knowledge right down to code writing," says Grimes, a graduate student in the School of Nuclear Engineering. "I am currently involved in Sagamore Adams, a company working in the field of nuclear engineering, and what I learned in this course has greatly increased my understanding of that company as well.”

After the students' presentations and funding recommendations to the Emerging Innovations Fund Economic Advisory Board, SensorHound received $75,000 from the fund with a potential to receive an additional $75,000 if certain performance milestones are met. The company is based on research by co-founders Patrick Eugster, associate professor, and Vinai Sundaram, research associate, both in the Department of Computer Science; and Matthew Tan Creti, a graduate student in the School of Electrical and Computer Engineering.

"The quality of the students who performed the due diligence for SensorHound made a strong impact on our company," Eugster says. "Going through the process not only helped us receive the current funding, but I believe it will help us secure additional funds to further advance our company."