Student-run venture capital firm Dorm Room Fund, approaching its first anniversary, is open for new business.
The firm, funded by First Round Capital, offers $10,000 to $20,000 in investments to each company it accepts. The money is meant to help the selected groups get over their first hurdles of financial risk. Applications — completed on the company’s website — are processed on a rolling basis.
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In evaluating companies, Wharton senior and investment team member Isaac Sukin said that beyond a genuine commitment, Dorm Room Fund looks at three main categories: product, marketing and team.
“The product we like is when founders tell stories to get us engaged,” he said. “It’s something people love and not just something lots of people like. It’s a lot easier to start a business with a real advocate.”
Entering its second year, Dorm Room Fund is launching several new initiatives, including 60 professional mentors — including Penn graduates — from the First Round Capital founders’ portfolios and other firms to provide advice to new companies. It also has deals with service providers set up for discounts, speaker events and help for fundraising more money.
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“A big benefit is being in the network … across cities and schools,” Sukin said. “It’s a great resource for advice because running a company is lonely — for most people doing it, it’s the first time they do it.”
2013 Wharton graduate Fred Wang, whose start-up Pagevamp was taken on by Dorm Room Fund, said for him, Dorm Room Fund’s network was most valuable.
“There are other really serious entrepreneurs in this program who are also passionate and skilled about building great products,” he said. “Being able to glean insights, bounce ideas and share war stories with people who are really in it is refreshing.”
Unlike some venture capital firms, Dorm Room Fund says that it focuses more on providing support rather than telling companies what to do.
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“What we tell companies when they come up to us to talk about investing is we don’t create any obligations for you,” Sukin said. “We don’t require you to send us [your] status on how you are doing or sit on the board to tell you what to do.”
Firefly, a customer service start-up first introduced by Penn students at the spring 2012 PennApps Hackathon, is among the eight start-ups funded by Dorm Room Fund and its first portfolio company.
“They really know how to create an environment that is good for young entrepreneurs,” Dan Shipper, College senior and co-founder of Firefly, said. “They are really hands off — they are there when you need help, but they don’t program anything for you. They’ve been incredibly helpful to us.”
Wang found both the legitimacy provided by being associated with Dorm Room Fund and its relationship with First Round Capital helpful.
“It’s comforting to be able to stop by First Round Capital offices in New York and Philly any time for advice from their team,” said Wang. “Investors we’ve spoken to almost always mention, ‘We saw that you’re part of DRF. Congrats.’”
Dorm Room Fund currently has locations in Philadelphia, New York and the San Francisco Bay area and plans to start a new fund in Boston.
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