Venture Capital Raises Billions for College Endowments

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Before the pandemic, the large endowments of American universities were already filled with money.

But as markets have skyrocketed over the past year, colleges have unlocked one-time gains in a generation that are more astronomical than any weird multidimensional thing their quantum physics professors are working on. New data shows who they need to thank: venture capitalists.

Follow the Yale Trail

Much to the chagrin of the Ivy League, Yale is a trailblazer. In the 1970s, the school paved the way for large American university endowments, i.e. more than a billion dollars, by devoting increasingly large pockets of its investments to capital. risk.

By 2020, large endowments from schools across the country had allocated an average of 11% to VCs, according to The Wall Street Journal. Yale had 16%. The strategy has proven to be lucrative and reliable, but has grown over the top over the past year.

The S&P 500 returned 41% for the year ending June 30, according to the Newspaper. And the average valuation of early stage US startups has increased by more than 50% in 2021 so far to reach $ 96 million. Venture capitalists passed these gains on to their main endowment clients:

  • Endowments of more than $ 1 billion generated an average return of 36% in the year ending June 30, according to Cambridge Associates.
  • The University of Minnesota endowment increased by 49%, that of the University of Virginia by 49%, that of Brown by 50% and that of Duke by 56%. Washington University’s endowment in St. Louis posted its biggest return on record, at 65%, to $ 15.3 billion.

Just an example: Take Sequoia Capital. Legendary Silicon Valley VC, which controls more than $ 3 trillion in market value, has invested $ 500 million in DoorDash and Airbnb. The two investments are now worth more than $ 23 billion. Among the participants in its flagship fund: the University of Notre Dame, Harvard, Vanderbilt, Princeton and Brown.

Give us a break: As their alma maters cash in, Americans currently hold a record $ 1.73 trillion in student debt.


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