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First Round Capital's Dorm Room Fund expands to Boston, with initial investments this fall

Posted by Scott Kirsner  September 10, 2013 08:00 AM

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For entrepreneurial students, there's a new source of capital on campus this fall: the Dorm Room Fund is coming to Boston. The fund, backed by Philadelphia-based First Round Capital, will have $500,000 to invest in student startups over the next two years. And a student investment team will be giving deals the green light.

"Students will have a unique perspective on these ideas and markets, as well as the teams building the companies," says Phin Barnes, the First Round partner who oversees the Dorm Room Fund. "We want to give them as much latitude as we can." Supervising the operation of the Dorm Room Fund, which already operates in New York, Philadelphia, and Silicon Valley, is CeCe Cheng, right. Cheng says the core of the Boston investment panel members will come from Harvard and MIT, "but we will also have an open application for students at other schools who want to be on the team." The panel meets weekly during the school year, and once a month over the summer. They are paid a two percent management fee to cover their operating costs, such as events and marketing.

Barnes says he hopes to see investments being made in Boston before Halloween. Most will be $20,000 or less. The investments are structured as convertible notes, a kind of loan loan that later turns into an equity stake when other investors come in. (With a convertible note, the company's valuation isn't set, so students won't have to haggle with their peers over what a startup is worth.) Any economic upside from eventual acquisitions or IPOs goes to First Round's limited partners and an entity that is designated by the students making the investments — like a campus startup incubator or a research center.

Barnes says that the Dorm Room Fund isn't intended to help First Round find promising investments sooner than other VC firms. "Some of the student teams will invest in areas we don't invest in, and some will invest in companies that wind up raising money from other VC firms," he says. The firm's goal, rather, is to build relationships with future entrepreneurs. "There's a chance that Dorm Room Fund will find the next Airbnb or Dropbox or Facebook," he says. "But the real benefit, I think, is if we can create a community and give them a little flavor of what First Round is like. Some of them will reach out to us when the time is right."

Cheng says Dorm Room Fund's San Francisco team has already made an investment in an MIT startup, EagerPanda. But that startup, led by CEO Ishaan Chugh, has moved to the Bay Area.

There are three Dorm Room Fund info sessions planned for students on September 19th and 20th: one at Harvard Business School; one at Harvard; and one at MIT.

Dorm Room Fund is similar to an initiative launched in late 2012 by Cambridge-based General Catalyst, RoughDraft Ventures, and New Enterprise Associates' Experiment Fund, both of which focus only on Boston-area schools (for now.) The Globe wrote about the Experiment Fund and its director, Hugo Van Vuuren, earlier this week.

Update: Here are the 11 students that will make investment decisions for Dorm Room Fund in Boston:

Matt Bilotti, Northeastern

Matt Bilotti is a Junior at Northeastern University studying Entrepreneurship and Computer Science. After serving as President of the NU Entrepreneurs Club and Product Manager at influencers@, Matt is now a Product Management Intern at HubSpot. A lover of tech products, healthy foods, and his moped, Matt is incredibly eager to help the student entrepreneurship community in Boston reach new heights.

Bruno Faviero, MIT

Bruno is a junior at MIT studying computer science and engineering, currently working as a software engineer for Kensho Finance. He is involved in entrepreneurship as the director of the nonprofit StartLabs, which brings together a community of student entrepreneurs from the greater MIT and Boston community for events like pitch competitions and hackathons. He looks forward to fostering a more tight-knit entrepreneur community in Boston by seeking out and helping those most excited about innovating. Bruno is also a news editor at MIT's newspaper, The Tech, and in his free time enjoys playing music, dancing, and sailing.

Casey Hogan, Northeastern

Casey Hogan is a Junior at Northeastern University studying Entrepreneurship and Computer Science. She most recently worked at the New England Venture Capital Association as their Marketing and Member Services Associate, and is now the President of the NU Entrepreneurs Club. She's very excited to use her experiences working in startups and in the Boston startup community to help students find the resources they need to build and grow their ideas into successful ventures.

Max Kanter, MIT

Max enjoys building all sorts of things physical and digital. He was formerly an intern at Fitbit and Twitter and is currently a junior at MIT studying computer science. In his free time, Max likes to buy unique, used furniture off of Craigslist and go for runs along the Charles.

David Kaufman, Harvard College

David is a junior at Harvard College concentrating in Chemistry and Physics with a secondary field in Computer Science. He is currently a Teaching Fellow for CS50, Harvard's popular introductory computer science course, where he is involved in hosting Hackathons and other events in the CS community. David serves as a course assistant in statistics and is a member of a quantum chemistry lab as well as various financial groups on campus. He is excited about joining a team that will help students bring new and innovative technologies to the marketplace. In his free time, David enjoys music and video production, pop culture, and spending late nights with friends at Pinocchio's Pizza.

Mike Lapointe, Boston College

Mike Lapointe is a senior at Boston College studying Management with a focus on Computer Science and Information Systems. Last summer he was a member of the TrueVentures TEC program in San Francisco. At BC, he is a TA for the IS Department and an alum of the TechTrek program. His passion for music and sports has lead him to a role as President of Music Guild of Boston College and a two-time Boston Marathon runner. He loves exploring new places and meeting new people, and is looking forward to helping build DRF Boston.

Michael Ma, Harvard Business School

Michael Ma is a first year MBA student at Harvard Business School. Prior to business school Michael was a founder of TalkBin, a company that was in Y Combinator (the incubator behind AirBnB, Dropox and many others) and funded by Start Fund. In April of 2011 TalkBin was acquired by Google. Michael then continued to work for Google for the past two years, his most recent role at Google has been as Product Manager on the Google Places for Business team. On campus Michael is involved with the Entrepreneurship club and Harbus Foundation. Additionally, he sits on the board of Cuponzote a Startup Chile backed company in Mexico.

Connor McEwen, Boston University

Connor McEwen is a senior at Boston University studying Computer Engineering. He's done research at BU, works in the Office of Technology Development, and took a year off to start Credport, taking part in Summer@Highland as well as Startupbootcamp Berlin. On campus, he's involved in the BU Entrepreneurship Club, the Honors College, and runs a BU Startups newsletter. He enjoys music, sports (especially football) and service with his fraternity, and rooting for the Packers.

Akanksha Midha, MIT Sloan and Harvard Kennedy School

Akanksha is jointly doing an MBA at MIT Sloan and an MPA at the Harvard Kennedy School. Previously, she was an M&A lawyer and founding team member of startup law firm Phoenix Legal. She has also worked at McKinsey, run a mobile-tech incubator as the entrepreneurial lead for MIT's Google funded Global Startup Labs program and is a founding director of Mentor Me India, a mentorship non-profit in India.

Anuv Ratan, Harvard College

Anuv is a senior at Harvard University studying neurobiology and computer science. He has worked at Romulus Capital, a seed-stage venture capital firm, where he evaluated investments and worked alongside various portfolio companies. He has also been involved with a variety of Boston-based startups including Disruptor Beam and Innerscope Research, and is currently working on building a crowdsourced disaster-relief platform. He previously interned at The Blackstone Group and Jefferies. Interests include neuroeconomics, UX design, and bhangra.

Linsday Ullman, Harvard Business School

Lindsay is currently a first year student at Harvard Business School. She previously was part of the founding team at Google Ventures, where she was an investor for four years, and before that worked in product marketing for various Google advertising products. She has also spent time in product management at Premise Data Corp, a Google Ventures and Andreessen Horowitz-backed startup in San Francisco. Lindsay is a (very) amateur runner and borderline political junkie. She graduated from Yale with a degree in history.

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