Stanford’s Graduate School of Business recently published an article by Margaret Steen about the first investment made by the Stanford GSB Impact Fund in Geneticure, a pharmocogenetic testing company “working on a better diagnostic test for hypertension [to] quickly identify which treatment will work best for which patient.”
On the process of vetting potential companies in which to invest, Dan Liss, MBA ’16, JD ’18 and captain of the Geneticure investment team, described it as follows: “We would set up a call to see where they are, what are their fundraising needs and analyze a set of criteria we deemed essential to our impact investing mission, such as whether the investment would be moving the needle for the company.”
According to C.O.G. Miller Distinguished Professor of Finance and Senior associate Dean of Academic Affairs Paul Pfleiderer, the necessity of the Impact Fund relates to how the private, public and nonprofit sectors fail to individually address today’s social needs. “We need to have students focused not just on the initial investment but also on due diligence over the years.”
The Center for Social Innovation’s associate director for experiential learning Loretta Gallegos says, “We like to focus on the Impact Fund as an education program and less as a fund that makes investments.” He elaborates that the program is about “understanding the whole process of making the investment” so students can get real-world experience.
Collin Galster, MBA ’16 and a Tokyo-based employee of the Boston Consulting Group, says experience is often a major obstacle that grads find themselves up against when they want to get into impact investment. “We hope that our fund will be the bridge that will get them to impact investment fund jobs.”