NewSchools Venture Fund was created in 1998 by social entrepreneur Kim Smith and venture capitalists John Doerr and Brook Byers, each of whom had witnessed the power visionary entrepreneurs held to create dramatic change in other sectors, such as technology. NewSchools’ founders believed that education entrepreneurs could similarly bring about much-needed change in public education if they had access to both early-stage capital and strategic, hands-on support to start and grow their organizations.
Newschools Fund I ($20 million, 1998 – 2002)
NewSchools’ first fund was designed to build a new type of capital market that could support the development of entrepreneurial ventures serving high-need students within public education.
The fund was intended to test the hypothesis that entrepreneurs can act as agents for change, capable of influencing and possibly even transforming large public bureaucracies. In our first fund, NewSchools supported nine entrepreneurial nonprofit and for- profit ventures. These organizations addressed key leverage areas within the context of standards, accountability and choice. Some of these organizations started systems of public charter schools, while others focused on preparing and supporting teachers and leaders, developing research-based curricula, or providing school performance information that parents and community members need to make effective decisions about education.
Together, these entrepreneurial organizations have reached thousands of schools and helped transform the lives of countless students, families and communities. Through our work with these organizations and others in the field, NewSchools also began to create an influential network of leaders from across the public, private and nonprofit sectors whose collective work is accelerating the pace of change within the broader public education system.
Newschools Fund II ($50 million, 2002 – 2006)
By 2002, NewSchools concluded that education entrepreneurs indeed played a critical role in education reform, and that NewSchools itself was needed to ensure the development of a continuing stream of high-quality entrepreneurial organizations.
To address this opportunity, NewSchools raised a second fund, totaling nearly $50 million. The goal of the fund was ambitious: to help create dozens of new public charter schools by developing strong, scalable and sustainable school management organizations with the capacity to provide thousands of underserved students with an excellent education. The centerpiece of this strategy was the creation and expansion of charter management organizations, which launch and operate integrated networks of public charter schools. NewSchools Fund II supported more than a dozen CMOs that together manage well over 100 schools and serve tens of thousands of students. These nonprofit organizations demonstrate that educational quality at scale is possible, even in low-income communities, while also providing replicable models for how to create and sustain systems of high-performing schools. In addition, the fund invested in a variety of charter school support organizations, which provide charter school operators with critical infrastructure, such as facilities development, administrative services, and academic support.
During this time, NewSchools also began to explore how it could help all public school systems become more performance-driven. We commissioned practice-based research and documented lessons learned from our work. NewSchools regularly brought the entrepreneurs in its portfolio together with one another by regularly convening them in person to identify mutual challenges, share effective practices and engage in collaborative problem solving. In addition, we continued to connect these entrepreneurs’ work with the broader field through events like the annual NewSchools Summit.
NewSchools Fund III ($75 million, 2006 – 2010)
NewSchools believes that creating successful alternative approaches to public education will ultimately influence traditional school systems so that they provide high-quality learning opportunities for all students.
NewSchools believes that creating successful alternative approaches to public education will ultimately influence traditional school systems so that they provide high-quality learning opportunities for all students. Given the scale of this challenge, the investment strategy for our $75 million third fund primarily focused on several key cities, including New York City, Chicago, Los Angeles, Washington D.C., Oakland, and New Orleans. We chose these target communities because of their size, history of underperformance, and potential for transformative change; in each, we worked to build an influential portfolio of successful, scalable and sustainable entrepreneurial organizations that both provide high-quality educational opportunities for underserved children and also create momentum for broader reform efforts.
As we considered the highest leverage opportunities for entrepreneurial work in these communities, we also sought to build on the lessons we had learned from our ventures – including the critical need for human capital to teach students, lead schools, and manage systems, and a dearth of tools at their disposal to measure and improve student performance. NewSchools Fund III backed new and expanding CMOs, continued to develop charter support organizations to address critical infrastructure needs, invested in new tools and services designed to improve instruction through the rigorous use of performance data, and expanded alternative pathways into teaching.