Forget the gala, these Silicon Valley schools run their own venture capital funds

Most American private schools still raise money the old-fashioned way—silent auctions, annual giving, and a yearly gala with mixed drinks and canapés.  

Crystal Springs Uplands School, a 569-student private day school located on the peninsula between San Francisco and Silicon Valley, still plans to throw a gala this year, but it isn’t the main draw for raising money. The fundraising, increasingly, comes from somewhere else. 

Crystal Springs is one of a small but growing number of Silicon Valley private schools that have built what amount to miniature venture capital funds. The funds are capitalized with donations from the school community, guided and overseen by parent-investors from well-connected firms such as Lightspeed, Notable Capital, and Sequoia, and are aimed at early-stage, pre-IPO companies. 

The approach was originated by Saint Francis High School in Mountain View, where a $15,000 pre-IPO investment in Snap returned $34 million when Snap went public in 2017. Nearly a decade later, with the IPO market heating up, a handful of schools are sitting on private portfolios whose value won’t be known until the companies go public or have other liquidity events. 

SpaceX’s June debut on the Nasdaq—the largest IPO in history at a valuation north of $2 trillion—signaled that the era of massive tech companies staying private indefinitely may be ending. Anthropic and OpenAI are widely expected to follow SpaceX founder Elon Musk into the public markets. For schools with pre-IPO stakes in companies of that caliber, even a small check written years ago could produce the kind of windfall that Saint Francis saw with Snap.

By any measure, we’re a long way from a bake sale. 

The mechanics are fairly straightforward, although the access and expertise required to make these funds work are anything but. A school sets aside a small pool of capital—donated from parents or alumni, and never drawn from tuition revenue or the operating endowment—and a committee of volunteer investors vets potential investments and decides how to proceed. 

At Saint Francis, the vehicle is called the growth fund. Barry Eggers, co-founder of Lightspeed Venture Partners, has chaired the advisory board for years, even though his own children have long since graduated. The fund was started in the 1990s by two parents in the venture capital industry who contributed about $250,000 in seed money. Today, the fund is overseen by more than half a dozen investors from firms including Battery Ventures, Mayfield Fund, Meritech Capital Partners, and Sequoia, as well as Lightspeed. 

“We have a mix of people who have early stage and late-stage deal flow,” said Eggers, “And we put it together, and we built a fund.”

Eggers generally asks each member to bring one deal a year. The fund invests in roughly 10 companies annually at $25,000 to $50,000 apiece. He estimates the fund has seen roughly $50 million in cumulative lifetime........

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