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Stanford University Invests in Its Students…Literally


From Peter Thiel to Sergey Brin to Sebastian Thrun, Stanford University has incubated more than its share of alumni who have gone on to become titans of industry and finance. But the university is not content to rest on these laurels; it has just announced that it will begin directly investing in startups created by students and alumni through the university-affiliated StartX accelerator program, which is also receiving a grant from the school. The size of the grant, $1.2 million per year for three years, is tiny next to Stanford’s $4.4 billion budget, but it’s significant for more than just its size.

The plan is not without its naysayers. As TechCrunch notes, many have voiced concerns that Stanford is abdicating its role as an educator in favor of commerce:

That tension between academia and industry was highlighted this past spring when a number of students dropped out of school to start Clinkle, a mobile payments startup that counts numerous Stanford professors as investors. The New Yorker’s Nicholas Thompson, a Stanford alumnus, questioned, “Is Stanford still a university?” in a piece titled “The End of Stanford?” in reaction to Clinkle.

Now, the University will be investing in the companies students form. The University’s professors may also invest in students’ companies, while trying to teach and advise them. And many of these students will take time off from school to launch startups. It’s a tough line for Stanford to walk.

We don’t see anything inherently wrong with this. In fact, we would like to see universities taking more of an interest in helping students do things like start businesses; most colleges already do far too little to prepare students for the workforce. In principle, we favor anything that would give a university more “skin in game” with respect to their students’ futures.

Of course, that’s not likely to take the form of a VC investment program at the vast majority of universities. Few have access to the students, capital, or industry connections that Stanford has, but for those that do, we would be happy to see them take more than an academic interest in their students’ professional futures.

[Stanford University photo courtesy of Shutterstock]

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  • wigwag

    I’m not sure about this. Why is it better for a university to invest in student run private ventures than for the university to waste money building gold plated athletic facilities or palatial dormitories? How many more administrators will Stanford need to hire to run its investment vehicle? Don’t the administrators already outnumber the faculty ten to one?

    Is there anything wrong with universities doing what they are supposed to do; educating students?

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