Harvard Launches Program to Fund Startups

Posted by: Louis Lavelle on January 25, 2011

Sometimes all you need to get started is a small push. That’s the idea for a new program at Harvard Business School designed to give budding entrepreneurs the financial wherewithal to launch new businesses before they graduate. The program—launched with the help of Harvard students and dubbed the Minimum Viable Product Fund, or MVP Fund—will dole out money to MBA students with promising startup ideas.

“There is a large number of us interested in startups, who wanted to get started on businesses while at school, but there was not much in the way of incubators or an entrepreneur’s scene,” said Daniel Rumennik, a first-year student at Harvard (Harvard Full-Time MBA Profile) who came up with the idea and proposed it with the help of classmates Jessica Bloomgarden and Andrew J. Rosenthal.

When professors caught wind of the idea, they quickly brought it to the dean, who was responsive. Now, HBS’ Arthur Rock Center for Entrepreneurship will give $50,000 in funding to various student startups that have a feasible and interesting business idea, said Rumennik. Each chosen startup will receive $5,000 with the option of asking for more but receiving no more than $10,000, according to the school-issued press release. Students will submit applications by Jan. 28. Meanwhile, the fund’s founders will have students vote for three faculty members and three students to sit on the committee that will review the applications and decide how to divide the available funding.

“This is the first step,” said Rumennik, who aims to launch his own startup before graduation. “We hope it becomes part of a larger incubation program.”

The MVP Fund is based on the premise of the Lean Startup methodology, which focuses on rapid prototyping, a process that brings products to market as quickly as possible and was developed by Eric Ries, an entrepreneur-in-residence at HBS, according to the press release.

Once the school invests financially in these budding businesses, student entrepreneurs will participate in monthly meetings to share ideas among themselves and meetings with a faculty mentor.

Already there is a grassroots group of students who get together to discuss entrepreneurial issues and related interests and ideas. Startup Tribe, as it is called, brings students face to face with alumni who have founded their own businesses and potential funders, said Rosenthal, leader of Startup Tribe. A co-founder of the now-defunct Happier.com, which had visitors paying a fee for access to help on how to be - you guessed it - happier, Rosenthal said there's a reinvigorated entrepreneurial spirit at HBS, where he added there have always been some students interested in startups.

Startup Tribe and MVP, he says, "are the impetus for this exciting new lease on entrepreneurship."

Indeed, Rumennik and Rosenthal both said they hope these efforts are just the beginning. Rumennik is hoping the funding available for student startups grows, and he said he could see venture capitalists or corporate sponsors pitching in eventually.

Some 50 percent of HBS alumni describe themselves as entrepreneurs 10 to 15 years after they graduate, according to the school's press release. Part of the MVP Fund's appeal, is that students can get started on their business ideas while in school rather than waiting a few years after graduation, said Rumennik. Wanting the entrepreneurial spirit to become a bigger part of the culture on campus is a top priority, added Rosenthal.

"Attracting more entrepreneurs to HBS will be an indication of our true success," said Rosenthal.

--By Francesca Di Meglio

Reader Comments

Steve Rudolph

January 25, 2011 11:33 AM

At the Carlson School of Management we announced a similar seed grant program yesterday to help launch student-owned ventures that incorporate sustainable business practices and environmental stewardship, community service, or biking advocacy.

http://ow.ly/3JVeG

Sean

February 1, 2011 1:41 PM

Here we come Brave New World.

Yeah, it took Microsoft and Fed Ex 50,000 from daddy or whomever to start.

Harvard was started by a preacher.

Gerard Peregrin

February 7, 2011 12:55 PM

Here are some ideas that can increase the scale of an entrepreneurial eco-system that startupamerica is calling for. https://docs.google.com/present/edit?id=0ATZwQPN5BYX8ZGcyODM2MzlfMGdqZ3Ztd2M1&hl=en

Wharton

February 20, 2011 5:19 PM

Wharton has been doing this for years. They have successfully incubated and supported hundreds of entrepreneurs, many of whom have sold their businesses in recent years to Google, eBay, and the likes. Check out http://vip.wharton.upenn.edu/default.aspx.

chris alexander

April 15, 2011 4:44 PM

Weather some investors agree or disagree, tech, and I mean start up or Angel investing is still the most financially lucrative opportunityout there. A decade ago we divided opportunities on high risk (startup investing) and low risk (public stock) etc. Considering latests shifts in economy, or should I say market crashes, it became evident, at least to me, that there is no such thing as low risk investments. And choosing between two evils, it's obvious, again, at least to me, that with to some degree equal level of risk it makes more sense to chose those investment opportunities that suggest much higher ROI and emotional gratification - feeling that you actually make a difference. So, with that said all the stock chat is not sexy to me anymore and I vote for Angel investment. And we deal every day with so many great ideas - cool mobile applications, cloud computing, new ad platforms... social web is still super hot. What to wait for?

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Read daily reports from BusinessWeek editors and reporters Louis Lavelle, Geoff Gloeckler, Alison Damast and Francesca Di Meglio and boost your chances of getting into your best-fit B-school.

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