It’s not your ordinary high school venture.
Saint Francis High School in Mountain View, California, had an early investment of $15,000 for Snap Inc., the maker of Snapchat. Back then it was a messaging app that was just getting popular with teens.
Fast forward to 2017, the Catholic school’s investment in Snap’s initial public offering is now worth a whopping $24 million.
No Accident
An investment in small technology companies may yield little or no return, as very few technology products “pass the market test” and achieve a popularity that goes from a niche group to the mass market. This makes it very unlikely for investors to make a lot of money in tech startups, noted Forbes.
However, it’s not entirely possible to rake in so much moolah.
Saint Francis’ astounding windfall was the result of patience that has its roots in 1990, when it established a development fund to raise cash for the school. Parents and alumni bankrolled the funds and set their sights on technology stock.
Part of the fund goes to scholarships awarded to children from less affluent families in the area, as tuition in the school is at more or less $17,000 per year. A huge chunk of its 1,760 students come from families that are well-to-do, including one who made the Snap deal possible.
Barry Eggers, founding partner at the venture firm that led Snap’s first investment round, had the bright idea of involving Saint Francis in the deal five years earlier. His children already loved Snapchat then.
“They were sitting around the kitchen table one day and they were all on their cellphones laughing,” Eggers of Lightspeed Venture Partners said. “They said ‘Dad, have you seen this app, Snapchat?’”
His daughter, he added, now uses the app 30 times a day.
Life-Changing For Communities
This news broaches the idea of investment firms allotting a share for schools, charities, and other causes that most need the funds.
In Silicon Valley and places with lots of tech ventures and entrepreneurial activities, investors can reach out to local schools and institutions and potentially include them in some deals, Eggers recommended.
Saint Francis, however, may be a hard act to follow since it takes long-term commitment. The institution needs to adopt a program and can’t consider it a one-time deal, he added.
Snap’s IPO is among the most curiously followed for a tech company since Twitter’s own IPO back in 2013. Its New York Stock Exchange debut is a crucial point for the company, often viewed as a threat to other social platforms Facebook and Twitter.
Snap saw its shares surging to 44 percent on the first trading day, although critics are quick to cite signs of impending trouble such as the decline in active everyday users.
This week, NBCUniversal had reportedly invested $500 million in the IPO as “part of a strategic investment and partnership.” It’s seen as one among different bets of the Steve Burke-led company in the digital media space, including a $400-million investment in BuzzFeed and $200 million in Vox.
