The Miami University Student Venture Fund (MUSVF) has invested in its second project-and students might come to benefit from the business decision.
The MUSVF recently invested $15,000 in College Discount Cards, a company created by Miami Univeristy alumnus Bruce Twersky.
Twesrky created College Discount Cards when he was a sophomore studying finance in 1999. He said that since its creation, the company has expanded to universities across the nation including the University of Arizona, the University of Southern Florida and even the University of Hawaii.
College Discount Cards allow businesses in college towns across the country to purchase ad space on a card that students and community members can use on purchases throughout the year.
Twersky approached the managers of the MUSVF in October 2007 in hopes of receiving finance money for his company. He said he hopes to expand College Discount Cards to 100 new campuses over the next three years. He also hopes to do more online marketing through Facebook.com and e-mail coupons.
Yet, money is not the only thing College Discount Cards received from the fund.
"Even more valuable than the capital they provide is their insights and suggestions," Twersky said.
The managers of the fund provide the growing companies with expansion opportunities, marketing strategies and advice to help the business prosper.
According to one of MUSVF's managers, senior Zack Tench, the fund reviews possible clients and only invests in those businesses that offer the most potential.
Tench and the other managers, seniors Scott Picklo and Wiley Curran, noticed the potential of Twersky's company.
"It's a win-win for the businesses, students and bookstore," Twersky said. "The students get discounts and the businesses get more traffic. It gives businesses an edge over their competitors."
Savings are available for many Oxford businesses including Cold Stone Creamery, Subway, Pizza Hut, Smokin' Ox and A Place to Tan.
According to Twersky, because the students receive the cards for free, his business model differs from other similar versions of discount cards. He charges businesses a flat rate for ad space, while other discount cards give businesses ad space for free and charge students an initial purchasing cost.
Tench said MUSVF's strategy to investment opportunities is based on word-of-mouth among entrepreneurs. He said the fund does not advertise itself because managers take the stance that entrepreneurs who take the initiative to learn about the fund are often more motivated.
"Investments are selected on a case by case basis," Tench said. "Factors such as market size, degree of market fragmentation and the scalability of the venture all play a part in whether or not the MUSVF invests in a particular venture."
Tench said the fund receives an ownership interest, based on the relationship between the size of the investment and the value of the company. Typically an exit strategy is built into the contract so that the entrepreneur can eventually buy back the ownership in order to both increase the autonomy of the business and reduce liabilities.
Tench said a professor from Miami's entrepreneurship department created MUSVF almost 15 years ago but the fund was restarted last year.
According to Tench, the fund is made up of several donations from anonymous and non-anonymous sources. The largest percentage, Tench said, was donated by Procter & Gamble.
The fund currently has $250,000 under management, with $40,000 of that currently invested in two places-$25,000 in GoPicnic, a company that offers boxed gourmet meals, and $15,000 recently invested in College Discount Cards.
According to Tench, the profit MUSVF earns from its investments goes back into the fund and is reinvested in other Miami entrepreneurs.
Financing is available to any Miami students and alumni within 10 years of graduation who hope to start their own businesses, according to junior Marisa Evans, public relations representative of MUSVF.
Receiving assistance from MUSVF has helped Twersky become more entrenched with Miami as well. Thanks to department connections, he spoke at a marketing class in February and received student feedback through surveys.
The discount cards are available at the flagship sponsor, Dubois Bookstore. They are also available online at collegediscountcards.com.
