The Dorm Room Fund: Helping Student Entrepreneurs Thrive

By Ryan Marschang, Wharton Undergraduate 2014

What is The Dorm Room Fund?

Over the past several years, more and more students have been turning towards entrepreneurship. As a student founder, you usually have a few options for raising seed stage financing. If you’re looking at taking financing from an angel or VC, chances are you’ll need to take a leave of absence from school or drop out entirely. Similarly, if you are aiming to join an incubator or accelerator like YC or TechStars, you’ll also need to get out of school. While those may be excellent ways to seriously pursue entrepreneurship, they shouldn’t be the only way.

The Dorm Room Fund (DRF) is a great resource on campus that supports students building their companies while staying in school. At its core, the DRF is a VC fund run by students, for students.

I first joined the fund as a member of the founding investment team when the first fund was launched in September 2012 in Philadelphia. Since then things have been moving quickly – DRF PHL has made nine funding commitments to date, we recently expanded to NYC and are currently launching a third fund in San Francisco. With $500,000 from First Round Capital, each fund aims to invest in student-run companies in their respective geographies. This means that DRF PHL aims to support student entrepreneurs not just at Penn, but at all college campuses in the Greater Philadelphia Area.

The Investment Team

As a member of the investment team, I have been actively involved in sourcing student-run companies, making investment decisions alongside the team, supporting our growing portfolio and helping support the Philly entrepreneurship community. The investment team at DRF PHL is comprised of 11 students from both Penn and Drexel with varying backgrounds. Many of us are leaders of different entrepreneurial organizations on campus ranging from the Founders Club to the Entrepreneurship Club to PennApps. Many of us are also fellow entrepreneurs and builders. Members on the committee range in age from 19 to 30 and everyone brings something unique to the table. Members have worked in industries ranging from ecommerce to edtech to cleantech, and some students have worked in VC. This diversity of backgrounds, I believe, allows us to make highly informed investment decisions on a wide range of companies.

When it comes to making investment decisions, one of the toughest challenges has been taking a definitive stance, either in favor or against funding a company, with the imperfect information typical of such an early stage. While we factor many things into our decisions, it isn’t uncommon for one or two really strong data points to end up swaying a vote. Each member of the team contributes different data points to our discussion. For example, a team member might have worked with one of the entrepreneurs before and knows the founders really well, or might know a particular market from previously building a company in that space. When it comes to taking a stance, we rely on one another. I think we’re able to do that because of the high level of trust and regard we have for our team members.

Working with Entrepreneurs

Besides the opportunity to work alongside an awesome team, I joined Dorm Room Fund because I fell in the love with the idea of students helping students build their companies. Since joining the fund, I’ve had the opportunity to work with amazing entrepreneurs, both undergrads and grad students, building companies in markets ranging from health IT to ecommerce to biotech. Students in Philly are working on some disruptive ideas and each week I look forward to hearing pitches and working with these entrepreneurs.

Sourcing

A lot of our sourcing at DRF PHL comes naturally. Members of the investment team have strong relationships with entrepreneurs in the area. Mainly because:

(1) We too are entrepreneurs in the same ecosystem.

(2) We work alongside them in different classes/organizations/clubs on campus and in the city.

(3) We hang out with them outside of class and attend the same events throughout the year.

Our first two investments, Firefly and Dagne Dover, are great examples of how members of the investment team knew the founders well before any investment was made.

While we have seen most of our applications to date come from Penn and Drexel students, we are actively reaching out to Temple, Villanova, Swarthmore and several other campuses in the area.

Moving Forward

As we continue to expand and make investments, we are working hard to build a network in which student entrepreneurs can really thrive. With the launch of DRF, students now have access to capital that will allow them to remain in school while they build their businesses. With funds already launched in Philadelphia, NYC and San Francisco, and the possibility of further expansion, we hope to connect and support the top student founders across the nation.

If you have any questions about DRF I’d love to hear from you. If you’re on campus come drop by our office hours every Monday from 5:30 to 6:30 p.m. @ 4040 Locust!

Ryan MarschangBio: Ryan is studying Chemical Engineering and Finance in the Management and Technology Program at Penn. He is a fellow entrepreneur and is passionate about energy and education. In addition to DRF, he is the Chair of the Weiss Tech House Innovation Fund and has interned previously @KhanAcademy. You can reach Ryan at rmarschang@dormroomfund.com or follow @RyanMarschang.