Fund focus: INSEAD alumni pay it forward

About three years ago, Deepak Shahdadpuri, a graduate of international business school INSEAD and managing director of venture capital firm DSG Consumer Partners, decided that an occasional cash donation to his alma mater wasn’t a sustainable way to show his support. The investor therefore went to work establishing a unique private initiative, with the blessing of INSEAD, aimed at creating a permanent and formal pool of capital for graduate entrepreneurs following in his footsteps.

By 2015, INSEADAlum Ventures had received the dean’s green light and a fund exclusively for and managed by INSEAD alumni was launched. The vehicle closed heavily oversubscribed this month at its hard cap of S$1 million ($700,000). Backers included 15 of the school’s former students, all of whom are managing medium to large businesses.

The plan is to make at least four very early seed-stage investments and reassess before potentially scaling up the new firm for another raise. It will be managed by Shahdadpuri and William Klippgen, founder of Singapore’s Tigris Capital, with a sector and geography-agnostic mandate.

Shahdadpuri, who spends about one day a month on campus advising PE research efforts, sees the project as for-profit, but with deeper motivations. “It’s not only about making money,” he says. “All of us who have been successful have received formal or informal support from the school or alumni over the years since we left the college, so we want to formally give back.”

Mentoring services will include access to the firm’s alumni backers such as Jani Rautiainen, co-founder of Southeast Asia-based property portal PropertyGuru, and Aloke Bajpai, principal founder of iXiGO.com, India’s largest online travel search portal.

On average, alumni on the team have spent 20 years in the business world, with the oldest members having graduated in the 1970s. “If you’re two years out of INSEAD, you don’t have the same reach as someone who’s been out 30 years,” Shahdadpuri says.

While criticisms of school-connected company creation efforts often point to a lack of business savvy among the academic support team, Shahdadpuri emphasizes that INSEADAlum Ventures has no formal connection to INSEAD. In fact, it required long negotiations with administrators to be able to use the school name, and he claims the fund is already tracking a deployment rate on par with other professional VCs.

Since opening applications in January 2016, 64 proposals have been reviewed, one investment has been made – a GBP480,000 ($583,000) round for UK-based internet-of-things player Switchee – and another was lost to a competing investor.

“This is not a charity to back INSEAD start-ups that cannot get funded – we’re are applying the same rigorous discipline as we do in our day jobs with other funds,” Shahdadpuri says. “But we believe that there is real business to be had backing INSEAD founders because over the past 10 years, I’ve probably invested in five or six, and overall, I’ve made a lot of money backing them.”

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• Topics
• Southeast Asia
• Early-stage
• Growth
• Fundraising
• Singapore
• seed
• Education