ALUMNI PROFILE
Kim Smith '89: Non-Profit
Entrepreneur

Kim Smith '89

Kim Smith ’89 is co-founder and CEO of a non-profit in San Francisco, the New Schools Venture Fund (www.newschools.org). The company acts like a venture capital firm, raising money and redistributing it through investments in entrepreneurial ventures. But instead of striving to make gobs of money, its motive is to improve education in low-performing public schools.

“We’re a cross between a venture capital firm and a public charity,” says Smith, who calls herself a serial entrepreneur. She was a co-founder of Teach for America and later started both for-profit and non-profit companies. “I believe that this hybrid way of thinking is really important. Neither the public sector nor the non-profit world nor the for-profit world has all the answers, so I wanted to create a space that mixed them.”

Money for the New Schools Venture Fund is raised from donations and grants. It is then invested in educational companies, both non-profits and for-profits, through grants, loans or an equity investment. The fund, which has 11 employees, takes a seat on the companies’ boards and works with them on strategy and recruiting. When money is made, it is reinvested in the fund to help other educational entrepreneurs.

“Our focus is on schools that have been underserved by their communities, which typically means urban communities,” Smith says.

The first fund they raised was $20 million, which was invested in nine entrepreneurial ventures, such as New Leaders for New Schools, which recruits principals for urban schools, and GreatSchools.net, an online guide to schools. Now they’re halfway through raising a second fund of $50 million. “We’re mobilizing a new group of investors who were passionate about education but hadn’t been engaged in it yet,” Smith says.

Smith had an interest in the crossover between business and education even before college. While in high school and at Columbia, she worked at a company that consults on business-education partnerships. Although she had applied to law school, upon graduation she met Wendy Kopp, who had just graduated from Princeton and was setting up Teach for America. Kim joined her and one other founder and built up the organization over the next two years.

“We all knew people who would have been excited about going into teaching,” Smith says. “We created Teach for America to recruit those people, who were going into investment banking and consulting because they were recruited by those places, and they weren’t being recruited for teaching in inner cities and rural areas.”

After two years, Smith moved to San Francisco to sort out whether it was non-profits that excited her or start-ups. To try out the for-profit world, she started a trade show for the wine industry, which she ran for two years. “Trade shows are all about capitalism and sales,” she says. “The investors were in it for the money. But my heart is in helping people give back to their communities.”

At that time, President Clinton created AmeriCorps, a sort of “domestic Peace Corps” that provides funding for community service in the United States rather than abroad. With AmeriCorps backing, Smith formed a non-profit organization that worked with about 20 others in the Bay area to develop leadership programs for youth. She led The Bay Area Youth Agency Consortium, which is still in existence, for three years.

With the experience of three start-ups behind her — before start-ups were fashionable — Smith enrolled in Stanford for an M.B.A. “People in the for-profit world pay more attention to management practices and fundamentals like strategy and finance. I thought it was important for those of us in the non-profit world to take advantage of those techniques, too,” she says.

At Stanford she was co-president of the entrepreneur club and met venture capitalists John Doerr and Brook Byers from the Silicon Valley firm Kleiner Perkins Caufield and Byers. She discovered their interest in education, and they asked her to do two independent study projects for them about social entrepreneurship and identifying how venture capital practices could be used to improve low-performing public schools. The New Schools Venture Fund grew out of those studies, with Doerr and Byers as co-founders with Smith.

“I’m really passionate about finding ways that children, especially underserved children, get the opportunities they deserve,” Smith says, “whether it’s cultivating young teachers or developing young leaders or what I’m doing now, which is cultivating education entrepreneurs who are building organizations to serve kids who have been underserved.”

S.J.B.