UM Ross Woman-Led Fund Unleashed

Sneakers by Jordana products. Photo courtesy of Michigan Ross

Sneakers by Jordana products. Photo courtesy of Michigan Ross


Thornhill says the fact the team ended up consisting of all women was not a “collusion” among the faculty directors of ZLI’s three other prominent funds. Still, having three women at the head of an elite B-school’s most robust and prestigious fund is “refreshing,” Thornhill says. “It’s not, ‘Oh look, another group of white guys sitting around deciding who gets money,'” he continues. “I’m just having a ball. They’re fun to work with, it’s fun to work with smart people.”

Whether or not it was a “collusion” among faculty members, it’s a notable step toward a past-due diversification of the traditionally white and male-dominated investment field. According to a TechCrunch study published in April, only 7% of partners making investments at the top 100 venture funds globally are women. When TechCrunch expanded the sample to 2,300 venture firms worldwide, the number barely ticked up, to 8%, confirming what many already knew — that VC is grossly over-represented by men. When the study looked at 54 corporate venture firms and 101 accelerators, the number of women partners grew slightly more, to 12%. The one positive from the report: 16% of newly founded firms — those founded in the last three years — have at least one woman as a founder. That number is up from 12% when expanding the time frame to five years.

“It is an incredible mystery to me why there isn’t more of this kind of activity, where women are leading funds and companies,” Thornhill says. “Because I see the skills they possess and the energy and commitment and passion to what they’re doing here, and I’m just blown away. Something is wrong with our system that we don’t have more of this.”

Indeed, a study of 2013 hedge funder performances found that women-run hedge funds outperformed a general tracking of funds by more than three percentage points. Some point to women generally being more risk-averse than their testosterone-pumping counterparts. While both Noel and Priori say they enjoy working on other student-led funds with male team members, they feel the women-only fund often has more reflective conversations and affirmations between team members. “It is refreshing to come into a room and say, ‘You’re a rockstar, you’re a rockstar,'” Priori says of the Founders Fund team. “We’re all women and we get to work together.”

Of course, just because this year’s advisory committee is composed of all women, it doesn’t mean that will be the case in coming years. Still, Thornhill says, this group is setting a strong foundation for advisory committees moving forward. And the dominant gender of the team didn’t influence the first investment focused on an apparel company, both Thornhill and the team members say.

“I can’t say my feminine lenses are what drew out the strengths, because the strengths of this company are so clear,” Priori says. “This isn’t the case of a hidden gem. This is a shiny gem and we immediately wanted to be a part of it.”


According to Thornhill, the Founders Fund is set up as a “carbon copy” of what they’ve already been doing with their student-run funds. In a few years, Schrager will have the opportunity to pay back the investment with interest, if she wants. If she does a venture capital series round, the $100,000 would be converted and the Founders Fund would become equity holders. If an exit were to happen, anything extra made from the interest goes back into the fund. The only time all of the money wouldn’t go back into the fund is if they hit a “home run” and get a “Dropbox” or “Airbnb” and the return is higher than 10x, Thornhill says. “It really just becomes a perpetual machine,” he explains. “There are never any payouts or money that leaves the fund.”

In the other funds, Thornhill says, it has taken around six years to get back the full returns. “So it’s really a long-term game,” he says, noting the emphasis on larger deal sizes for this particular fund to maximize impact.

When Schrager approached the fund, she actually asked for a smaller amount. But the team decided she would need more and set up the investment to give her the first $50,000 right away and disperse the second half after benchmarks are hit. Some of those benchmarks include nailing down more and different distribution channels, increasing social media presence, and selling a certain amount of the new product line.

“We already knew she sold a lot beforehand, but we wanted to be sure that she sells at least a little over half of this mass production amount she has now in order to feel like she’s on track to sell the total amount as the second milestone,” Noel explains, noting they also want to see “evidence of contracts in place with retail stores” to make sure the retail distribution channel is “locked up.”


Noel says the Zell Founders Fund has also placed a $75,000 investment in Brazil-based agriculture tech venture Perform, founded by Michigan Ross MBA Luiz Roberto Sodré, and has two more potential deals on deck. For Noel, who came from the education nonprofit world, making a $100,000 deal in the first month of her second year of B-school is a bit surreal.

“I’m in many ways an unlikely business school student. My background didn’t put me on track to say, ‘I just pulled a $100,000 deal in the first month of school,'” she says. “That’s not my life. At all. To me, the Founders Fund is affirmation on a higher level to just go for it. It’s the universe saying, ‘Just go for it and see what happens. There are going to be people to support you and help facilitate.'”

Priori says, in many ways, the fund’s all-women team feels “natural.”

“Even though we are in the minority at Ross, women take a lot of leadership roles here,” she says. “We’re a very visible part of Ross’s culture and leadership. It’s not super uncommon.”

For Thornhill, the funds at Ross are less about creating the next batch of investors and more about creating the next batch of well-rounded entrepreneurs. “In many ways, my goal is to help students be successful entrepreneurs,” he says. “Because there is no greater advantage going to their first negotiation to raise capital than having been on the investor side of the deal table for a couple of years.”


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