Conrad Kranz and Joshua White, both involved with the UND student-led Dakota Venture Group, cite the benefits of lessons learned outside the classroom, as they look for investment opportunities in the region and beyond.
Dakota Venture Group, located on the UND campus in the Center for Innovation, is a venture capital firm that provides student members with a hands-on education in investing. It will see Kranz, its chairman, graduate this month, with White stepping into a leadership position. Both share similar sentiments about being involved in the investment group.
“The experience is, by far, the most beneficial experience during college, for the simple sake that we operate as a real business,” said Kranz, an economics and accounting major, who plans on attending law school after graduation. He added that he couldn’t get that experience through a classroom.
White, a second year data science major, was quick to agree.
“Just like him, I’d say it’s the best experience I’ve had in college,” he said.
Started in 2006 by retired venture capitalist Bart Holaday and his wife, Lynn, as an educational opportunity for UND students, DVG has seen growth over the years, both in terms of investing as well as membership. There are, according to Kranz, about 160 alumni who have participated in the group. Now there are around 20 members in the group who oversee nearly $2 million between two investment funds. DVG was the first student-run venture capital group in the United States, though others have sprung up around the country, and the world, since then.
According to White, in the past two months, DVG has screened anywhere from five to 12 business plans a week.
The most recent investment has been in a health technology software company out of Iowa, called OmniLife.
“They specifically focus on transfer of information surrounding organ donation,” Kranz said.
Performing investment work is not without risk, but Kranz said DVG is making returns on its investments, though it does take time.
“It’s not a constant flow of return, obviously,” he said. “We're hoping we have companies in our portfolio right now where we want them to be building their value. We want to help them so that when the time comes for them to either be acquired, or, if they're making enough money to hold some form of liquidity event for investors, that their value is high enough that we would make a return.”
Still, many startup companies fail, and that is part of the educational experience of DVG -- performing due diligence research, as well as investor relations and portfolio management.
“We pretty much expect a solid 80% of companies that are presented to us just flat out fail,” White said. “The goal is to really minimize the amount of failures we have within our portfolio and maximize our winners. So really doubling down on companies that we see that have a chance to be industry changers.”
DVG manages two funds, the Innovation Fund, a not-for-profit fund set up as an Evergreen Fund, which means that returns from investments are constantly fed back into the fund. Some companies in the fund include the Fargo-based Edgewood Real Estate Investment Trust, and Seattle, Wash.-based Hilltopper Electric Bike Company.
The other fund, the Harvest Fund, is for profit, and has more of a focus on investing in companies from the Upper Midwest, such as POPS! Diabetes Care, out of Minneapolis.
“They are completely changing the way people manage their diabetes,” Kranz said. “They have some pretty cool technology going.”
Compensation from being involved in DVG comes in the form of educational experience as opposed to financial compensation, a foundational value of the group.
“The experience is really priceless, when you think about it,” Kranz said.