UND student-run venture capital fund seeking to become largest in the nation
May 21—GRAND FORKS — Dakota Venture Group (DVG) — a student-run venture capital fund consisting of UND students — is in the process of creating a new investment fund that would make it the largest of its kind in the U.S.
Founded in 2006 through a donation by the Dakota Foundation, DVG is one of the oldest student-run venture funds in the nation. It allows UND students of all majors to gain hands-on experience in the fields of investing and venture capital.
DVG is advised by prominent business leaders in the community, representing the health care, aerospace and tech sectors.
Dev Patel, a graduate student studying computer science and a management associate with DVG, said the organization is off to a good start with fundraising for its new fund — called Harvest II — with an ambitious goal.
"So far, we have a soft commitment raised of about $500,000-$600,000," he said. "We want to be the largest student-run fund in the United States, and hit a goal of $5-10 million."
Patel said fundraising efforts entail what is called a "pitching process," where associates meet with potential high-net-worth clients to discuss DVG's mission in hopes of securing funds. Patel stressed that although DVG is a learning experience for its members, the organization has a goal of generating returns for its investors.
"We try to focus on talking about how we're students, we're trying to learn about how the business side of venture capital works," he said. "We're also trying to make a return on their investment — we don't want any losses, just growth."
Patel pointed to an existing investor relationship as proof of DVG's success in generating returns.
"An exciting new prospect is that one of the companies we've invested in might buy their shares back from us," he said. "From a $25,000 investment, we might make (a substantial) return and make over $1 million. That would be the largest return in DVG history."
According to Patel, Harvest II will allow DVG to further diversify its investment portfolio, and promote economic growth in the Midwest.
"We want to have sustainable growth and the ability to diversify," Patel said. "We invest in sectors like aerospace, health care and technology."
Despite the successes, Patel said current economic conditions — namely high interest rates — have posed challenges for DVG.
"Banks used to lend a lot of money to venture capital funds, but they're not doing that anymore," he said.
In addition to expanding its investment portfolio, Patel said Harvest II will also solidify DVG's future, and increase its stature nationally.
"When I graduate, I want students 10 years down the line to be able to invest and grow the company," Patel said. "As a long-term strategy, we felt it best to start another fund. We want to get DVG's name out there, and gain more national recognition."
