By Ryan Underwood
San Francisco, CA
Budget: $2.4 million
As far back as high school, Kim Smith recognized that when it came to public schools, policy makers, business leaders, and educators all wanted the same thing: high performance. But they could never work together effectively. Now Smith, a Stanford business school grad and cofounder and CEO of the NewSchools Venture Fund, is determined to make private-public partnerships work for America's sagging education system. Her model? Venture capital.
NewSchools has started two investment funds, now totaling about $50 million, which focus on charter schools and performance. It has invested $20 million of that in 11 for-profit and nonprofit ventures -- from GreatSchools.net, an online service offering school performance information, to Teach for America, the well-known nonprofit that places talented college graduates as teachers in needy schools. To attract investments, groups must show that their projects will have not just immediate impact but also longer-term systemic effects. They also have to prove a viable bottom line: Can the project make money or, at least, be financially self-sustaining?
Smith points to GreatSchools.net as a good example of what NewSchools is all about. GreatSchools.net is a for-profit enterprise that compiles and sells public-school rankings online. Not only does the company provide an immediate service -- namely, helping parents make informed decisions about where to send their children to school -- it also puts pressure on the schools themselves to perform. It's that transparency, Smith says, that will have a lasting, almost killer app, effect on the entire system. That, and it's just a solid business model capable of making good money.
"Our goal is to create business models that are sustainable over time," Smith says. "We don't expect any of the projects we fund to stay with us forever."
NewSchools itself even hews to its model. Not only is it well-positioned from a financial point of view, but the more money the nonprofit makes, the more ventures it can fund and grow for the long haul.
Kim Smith, Cofounder and CEO
Prior to cofounding the NewSchools Venture Fund, CEO Kim Smith was the founding director of BAYAC AmeriCorps, a consortium of nonprofits in the San Francisco Bay Area, and a founding team member of Teach For America. She is a member of the 2002 Class of Henry Crown Fellows of the Aspen Institute. Smith, 36, has served on many education venture and advisory boards, including EdVoice and the Stanford University School of Education. She began her career as a consultant specializing in business-education partnerships. Smith holds a bachelor's degree in political science and psychology from Columbia College and an MBA from Stanford.
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