Dorm Room Fund & NYU entrepreneurs - What You Need To Know

Samantha Ku graduated from NYU Law in 2017. While studying at NYU, Samantha was also a student investor for the Dorm Room Fund and an active member of the NYU Entrepreneurial ecosystem. Samantha shared her thoughts on founders, technology and investment opportunities. 

Contrary to a popular belief held by some entrepreneurs and venture capitalists, college campuses are increasingly becoming hotbeds for entrepreneurship. The Zuckerberg Effect led some aspiring entrepreneurs to drop out of college while other founders remained to assemble their teams, convert classmates into customers, test initial hypotheses and leverage resources provided by the university. In fact, the founding teams of game-changing companies including Snapchat, Warby Parker, Reddit and Dropbox assembled while still in college. The value of the college experience for an entrepreneur remains a contested topic but in recent years, proven venture investors are tapping into college campuses to identify entrepreneurial talent.

New York University established the NYU Innovation Venture Fund in 2010 to invest in startups established by faculty, researchers, and students. In that time, the fund has made 15-investments in NYU companies including Brooklinen, Clarifai, Vengo. The Innovation Venture Fund has partnered with external funds such as Union Square Ventures, Google Ventures, and Qualcomm Ventures to help these companies achieve scale. To further understand the motivation of venture investors, I spoke with Samantha Ku, who was formerly the New York Investment Partner for the Dorm Room Fund of First Round Capital.

In 2012, Josh Kopelman and First Round Capital established Dorm Room Fund, which has invested in over 130 early-stage companies run by students. Excerpts from my conversation with Samantha can be read below.

What motivated Josh Kopelman to establish Dorm Room Fund (DRF)?

While the cost to start a company has dropped significantly in recent years, it still does require minimal capital for hosting, incorporation, etc. Dorm Room Fund bridges the gap between grant competitions and any financing provided by friends and family to help an entrepreneur meet the milestones necessary to raise a full seed round from institutional VCs.

A student with entrepreneurial talent shouldn’t be deterred from starting a company because of early development costs. We wanted to level the playing field - entrepreneurship shouldn’t just be for kids whose parents have the resources to support them in the early days. DRF makes $20,000 investments in student-led startups, and we invest primarily at the pre-seed stage. We usually like to see a prototype or minimum viable product with some evidence of traction, whether that is a pilot or other positive indicator of users or customers in the pipeline.

How do student entrepreneurs benefit from the ecosystem at NYU?

There is an inherent competitive advantage to being a founder on a campus. A student entrepreneur has access to professors that are qualified experts in their respective fields and classmates that are essentially an early user base to test their hypothesis. I’ve been at NYU since 2007, and I’ve seen an uptick in entrepreneurial activity since the eLab opened in 2014. NYU has ramped up funding and services available, and the advice I’ve heard from some of the members of the Entrepreneurial Institute has been spot-on. There is also some awesome technical talent at NYU between students and faculty at Courant, Tandon, CAS life sciences departments, and other schools. To the extent that students are interested in accessing the resources provided by NYU, they’re easy to find.

What qualities or patterns of success does the Dorm Room Fund look for in student entrepreneurs?

Given that we invest so early, our investment thesis is usually based primarily on the team. Many of these students have not worked within an industry yet, but we often look for some sort of industry expertise in one form or another. It is not a requirement, but we are often impressed by Ph.D. students who have developed a deeper understanding and defensible IP through their research. In a different example, we made an investment in Theatre Galleria early last year. Jackie, the founder, was impressive in that she had a deep expertise in the theater industry and she exhibited a deep understanding and empathy for her customers.

For non-technical founders, it is very much about their ability to demonstrate that they’ve been able to push through barriers and accomplish a lot with very few resources. We also want to invest in a founder that is able to convince someone to join their team. This can be an indicator of success because eventually, they have to inspire talent to join their team.

How does your investment team evaluate new opportunities and what is the process for a student entrepreneur?

Dorm Room Fund is currently in four cities. In New York, we have investment team members from NYU, Columbia, Princeton, and Yale. I’ve been a partner for a year. We’ve made 10 investments since I joined last February.

Partners source deals from their own college campuses, but we also take funding applications from any team that is in the U.S or Canada and has at least one enrolled, full-time student or a full-time student that graduated in the past three months. The founder will first meet with two individual partners and if that goes well, he or she will make a formal pitch to the entire New York investment team. All investments based on a majority vote by all the partners (currently 8 in NYC). For portfolio companies, we provide ongoing support and help make introductions to VCs when they are ready to raise further funding.