At the Digital Media and Learning conference last week, I heard a number of people mention scale. Projects were growing fast, gaining “traction,” attracting new partners and inquiries. At the same time, there were hurdles: finding time in already compressed schedules, understanding and leveraging resources, raising funds. How then does a promising foundation-backed grantee/organization/project scale their work so that it has meaningful impact in the world? The timing might be right, and the tech might be innovative, but there is more to the picture.
It’s no news that foundations have borrowed from the venture and business worlds, looking to support longer-term projects and making capital more efficient. They vet the project, the management team, and the market. They do their due diligence. Something is missing from the equation, though: a bridge from start-up seed funding to viable footing in the marketplace.
Enter Startl: “Identifying talent and advancing products for the future of learning.” At DML2010 I talked with co-founder Diana Rhoten about her goals. Rhoten had seen too many projects receive funding, then wither when the funding cycle ended. So, with impressive co-founders and partners, she created an organization to fuel this growth to viability. Rhoten is also focused on how foundations can collaborate to help grantees succeed. Syndicating to scale growth.
The venture capital industry has long used syndication to enhance an investment’s likelihood of success. Magnifiying, amplifying. So, for example, several venture funds amplify their capital’s effect by pooling money to invest in a start-up entrepreneur, thereby also mitigating some of the risk in an inherently risky business. The start-up typically needs follow-on rounds of capital, and having partners with resources makes good sense. Beyond capital, though, syndication broadens the entrepreneur’s networks—business partners, sales channels and relations, and knowledge and experience. Surely these assets would also benefit a grantee.
Of course, a foundation’s backing a grantee is not a direct analog to a VC’s investing in an entrepreneur. The VC’s fiduciary responsibility is to return capital (and hopefully double-digit multiples) to its Limited Partners, the investors. The foundation is focused on its mission and program goals, and not necessarily on Return on Investment (ROI), although a definition of ROI might consider other factors as a “return.” There are nonetheless overlapping areas where the non-profit world might borrow from VC practices. And perhaps a group like Startl can help a professor/innovator with a promising mobile learning application scale to self-sustainability.