Company in student-managed investment portfolio goes public
Handling the investments of 11 companies is an exciting, one-of-a-kind opportunity for students enrolled in the Samuel Zell & Robert H. Lurie Institute for Entrepreneurial Studies at the Stephen M. Ross School of Business.
Even more thrilling for the 75 students who have managed the fund at different times since 1998 was the recent presentation of a check to the school for more than $1 million. The sum represented proceeds from one of the companies that had just gone public with sale of its stock.
At a celebration for the Wolverine Venture Fund (WVF) Oct. 8, students, faculty and staff involved with the only university-based venture fund of its kind in the United States celebrated that IntraLase Corp. has made its initial public offering (IPO) on NASDAQ. IntraLase, trading under the symbol "ILSE," is the first of the WVF's portfolio companies to go public.
"This is a milestone achievement for the Wolverine Venture Fund, the Ross School of Business and the University itself," said Timothy Faley, managing director of WVF and the Zell Lurie Institute. "The idea of the fund was to have a real-world experience for students to develop real-world leadership skills. We don't know of any other fund in the country that lets students make these kinds of decisions."
During the event, Institute Executive Director Thomas Kinnear presented Ross School of Business Dean Robert Dolan with a mock check representing the sum.
"We talk in the school about being leaders in thought and action. Some kinds of actions are better than others," Dolan joked at the presentation.
"This is a symbol of the kind of distinctive educational opportunities we have here and the students who carry them out," the dean added, all kidding aside.
WVF is a multi-million-dollar venture capital fund that invests primarily in early-stage, emerging growth companies with the active involvement of MBA students, faculty, and an advisory board composed of professional venture capitalists and entrepreneurs. Students research the companies, evaluate business proposals and make final investment decisions.
"There's a lot of responsibility that comes with doing the due diligence," said current student Todd Sullivan. "You're investing real money and making real decisions."
Former student John Cunningham, one of the first to manage the fund, said he enjoyed the opportunity to see companies pitch themselves as worthwhile investments.
"It was interesting to see from the inside how they think about deals and approach getting investors," he said. Cunningham now is a new business development specialist for the U-M Office of Technology Transfer.
Just as in any other investment organization, Kinnear said choosing companies for the fund is always something of a gamble, but the students involved do the research as thoroughly as the professionals. In doing so, they gain valuable skills that are unmatched in the industry.
"They tell us this is the most fantastic experience they've ever had and they are confident when they leave here that they know how to do it," Kinnear said. "Nothing is foreign to them, and they have a network of people to call on if they need advice after they've left here."
In addition to faculty and alumni students, the network includes a number of entrepreneurs such as advisory board member Don Walker of Arbor Partners, a venture capital firm that focuses on e-commerce and e-business.
"It's great to work with young people who are interested in entrepreneurship," Walker said.
IntraLase is an ophthalmic medical device company that has developed and markets ultra-fast laser, related software and disposable devices for use in LASIK, the most common vision-correction process in use today. Its laser technology offers a blade-free approach for performing the critical first step of the LASIK eye surgerycreating the corneal flap.
Researchers at U-M founded IntraLase in 1997 in conjunction with Escalon Medical Corp. of Skillman, N.J. The founders are Dr. Ron Kurtz, then-associate professor of ophthalmology at the Medical School, and his colleague Tibor Juhasz, associate research scientist in the Kellogg Eye Center and Center for Ultrafast Optical Sciences.
WVF was one of the principal investors in IntraLase (along with EDF Ventures and Brentwood Venture Capital) in May 1998, and participated in three additional rounds, most recently in November 2001.
For more information, visit WVF online at www.zli.bus.umich.edu/wvf/.