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When former Wharton student Jack Abraham was 5 years old, his family friend Len Lodish taught him how to ride a bike. More than two decades later, Lodish would find himself providing a different kind of mentorship to Abraham — this time as a Wharton marketing professor, with Abraham as an undergraduate.

“Starting at the beginning of his junior year, Jack came in to my office every two weeks to tell me about a startup idea, and I would find something wrong with it,” Lodish said.

But then, Abraham pitched Milo — an online market for local products — to Lodish and an investment partner, who both decided to make an investment in the fledgling company. Their business sense would later pay off: as 2010 came to a close, Milo was sold to Ebay for $75 million.

Though a history like Lodish and Abraham’s may be exceptional, professor involvement in student ventures at Penn is not. For many student entrepreneurs, professor relationships are the entry point for connections — and funding — outside of campus. For these investor professors, the return is often equity in a nascent company, some of which make it big.

Another Penn startup that was seeing success two years ago was Invite Media. Started by two Engineering and two Wharton students, Invite produced a platform for auctioning display advertising that was bought by Google during the summer of 2011 for $81 million.

Nat Turner, a 2008 Wharton graduate and co-founder of the company, said that his early connections with professors were instrumental in launching Invite.

“When we’re at school, professors have an open-door policy,” Turner said. “That’s in contrast to the broader venture capital world, where face time is at a premium.”

Among its professorial advisers, Turner counted computer science professor Michael Kearns. Kearns, unlike many angel investors, comes from an academic background, and often advises student startups on issues related to his research, such as machine learning and social networks.

A number of those startups have come from Penn undergraduates.

“Students are always very enthusiastic and energized and excited about what they’re doing,” Kearns said. “And that’s infectious.”

Kearns, who founded the newly created Market and Social Systems Engineering program, said he has observed a definite uptick in the number of students who have sought him out for startup advice or funding, a trend that other professors echoed.

One recent example is Coursekit, the New York–based education management service whose CEO Joseph Cohen was in Kearns’s “Networked Life” class before leaving Penn after his sophomore year in May 2011 to work at the company full time. In early January, Coursekit raised $5 million in venture capital, some of which came from Kearns.

Like many professors, Kearns sees himself as filling a void in Penn’s startup culture.

“The entrepreneurial community here at Penn is a bit underserved,” Kearns said. “I think the students and ideas and talents are terrific, but I don’t think as an institution we’re doing as much as we could.”

Operations and Information Management professor Kartik Hosanagar agreed. An “Entrepreneurship” tab on his webpage proudly proclaims his involvement with a number of Penn startups.

Soon after coming to Wharton, Hosanagar began working with then-Wharton undergraduate Nathaniel Stevens and helped found Yodle, a small-business advertising company. After going on to advise Milo, he noticed what he felt was a flaw in the system.

“A lot of really bright students with potential and interest in entrepreneurship would often lose their way along the course of a four-year education,” Hosanagar said. “By the time they were ready to graduate, the offer from a consulting firm or I-bank would dominate their true entrepreneurial passion.”

Hosanagar decided to take a more active role in entrepreneurship mentoring, in some cases reaching out to students who created compelling ideas in his “Enabling Technologies” course. Almost all his startup investments have been in former students’ companies, Hosanagar said.

“I have to know an entrepreneur really well, and the best way is for them to have been in my class,” he said.

Professors differ on the question of when it is appropriate to become involved in student-run companies, though all agreed that it would be inappropriate to advise or invest in a current student.

Wharton entrepreneurship professor Karl Ulrich makes a policy of only investing in graduates, many of whom were his students at one point.

“While entrepreneurs are students, faculty have a primary obligation to educate, without regard for personal financial gain,” he said.

Though faculty caution that success stories may be hard to come by, those that do succeed often look back on their early relationships with investor professors as a key formative experience.

“I’d like to think that Milo could have been successful without Kartik [Hosanagar] and Len [Lodish],” wrote Abraham in an email. “That being said, they were certainly a huge help and catalyst, making the journey smoother and faster than it might have been otherwise.”

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