Founders Factory trains UK students as venture capitalists

Brent Hoberman, one of the UK’s most prominent tech investors, has recruited students at 13 universities as venture capitalists and given them money to back start-ups founded by their peers.

Mr Hoberman’s Founders Factory is financing Creator Fund, an attempt to spot entrepreneurs even before they graduate, with a focus on education start-ups.

Students will be trained as VCs and given the authority to invest up to £30,000 per start-up. “In the US, many of the great tech companies were born on college campuses — Facebook, Google, Snapchat & Yahoo were all started by student founders,” said James Macfarlane, Creator Fund’s chief executive.

“The UK has some of the world’s best universities and the same potential for students founders to be creating great businesses.”

An initial group of PhD, masters and bachelors degree students have already started helping with due diligence exercises on potential investments.

They include Joe Brown, 25, who is undertaking a PhD in machine learning and artificial intelligence at the University of Oxford; he is mentoring Creator Fund teams at the universities of Aberdeen and St Andrew’s as well as leading a group at his own place of study.

Our goal is to spot aspiring student entrepreneurs before they start looking for capital

“There is a lot of learning on the job,” said Mr Brown. “Investors at Founders Factory have talked us through conducting due diligence and how to structure term sheets. We have been typically seeing two to four start-ups a fortnight.”

The hands-on experience of the Creator Fund would be a benefit for either a career as a partner in a VC firm or a founder, he added.

Creator Fund has made one investment to date, in Refund Giant, a smartphone app that automates payment of VAT refunds to people visiting the UK, co-founded by three Imperial College students.

Anna Briggs, another Creator Fund student investor, in her second year of an MBA at London Business School, was involved in the deal.

“Our goal is to spot aspiring student entrepreneurs before they start looking for capital,” she says. “I was excited to be involved not just from a CV building perspective but to help construct some of this start-up support infrastructure.”

Creator Fund was inspired by the success of the Dorm Room Fund, a US VC firm focused on investments in student start-ups, said Henry Lane Fox, chief executive of Founders Factory.