First Round’s Dorm Room Fund raises $12.5M Fund IV

Because many of the world’s most successful tech companies were conceived by college students, recent graduates or dropouts, VCs and their limited partners have long tried to find a way to tap into that youthful creativity as early as possible.

Dorm Room Fund, which hires students to invest in student-founded startups, was launched in 2011 by Josh Kopelman as a unit of First Round Ventures. On Tuesday, Dorm Room Fund announced a $12.5 million fourth vehicle, its first as an independent entity with its own limited partners. The fund is led by general partner Molly Fowler.

Although First Round will remain a significant backer, Dorm Room Fund’s new LPs include prominent VC industry names such as Chris Dixon and Marc Andreessen, along with firms such as Underscore VC, Insight Partners and Quiet Capital.

The firm’s student-investor teams write checks of $40,000 to startups whose only requirement is that one of the founders is either a student or a recent graduate.

Since its founding, Dorm Room Fund has backed 369 companies, according to PitchBook data. Its most significant exits include FiscalNote Holdings, which went public via a SPAC this summer. The firm’s portfolio company Plasticity, a natural language AI specialist, was acquired for $2 million in 2020 by Executive 1, a holding company.

While Dorm Room Fund is the only firm where students make investment decisions, the firm is not the only VC targeting campuses as a source of entrepreneurs.

In 2012, General Catalyst created Rough Draft Ventures with the plan to back Boston-area student founders.

The House Fund was launched in 2016 with the aim of funding startups launched by University of California, Berkeley, students and graduates.

Other experiments to discover student founders at Harvard University and MIT include Xfund, a firm set up by NEA, Accel, Breyer Capital and Polaris in 2011. Xfund, which eventually expanded to other universities and raised a $100 million vehicle, later ran into turmoil stemming from a high-profile dispute among its partners.

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