A Google-backed student Lead, a CEO of a unicorn, and a college VC fund have teamed up to create a startup powerhouse in one of London’s most iconic universities, the London School of Economics (LSE). Recently ranked one of the best unicorn universities in Europe, the LSE has a number of high-profile success stories within its network including unicorns Oaknorth, Mano Mano, Oda, Bitpanda, Allbirds and Tractable.
The number of companies started by LSE founders has grown from just over 1,000 in 2010 to over 2,600 in 2020, with over $12 billion raised in venture capital equity since the start of 2018. Over 160 countries are represented by LSE entrepreneurs, with 30% in the U.K., 25% in the U.S., 7% in India, 5% in Germany and 2% in Canada.
The four LSE alumni behind the initiative include Jack Lee, who runs a Google Developer Student Club (GDSC) program to help more students break into technology and help college students at the LSE. Adam French, former CEO of Scalable Capital, has teamed up with Hannah Leach and Veronika Kapustina, partners and cofounders of Houghton Street Ventures, to create one of London’s largest student focused VC funds.
The goal of their combined efforts is to create an ecosystem at LSE that will provide students with access to leading technology programs, ideation and insights, and seed funding and mentorship to B series funding, all in one place.
The GDSC program is aimed at building peer-to-peer technology communities which brings students together to develop unique solutions through tech events, collaborations with Google. Projects at LSE include Project Ember which develops Machine Learning AI that tracks wildfires abroad as they occur, Project Fungi, which analyzes London’s brownfield sites to convert them into urban farming locations, and Project Carbon, a website add-on that tracks carbon emissions in partnership with credit card companies.
Lee’s initial goal was to recruit 100 students in London into the program. In the end he recruited 1,700 from across Europe. Within six months, tens of thousands of participants were on board, creating one of the largest student tech communities in the world. Working with funding partners like Houghton Street Ventures, he says, has taken this into high gear.
“It provides continuous feedback on the common stumbling points in a startup’s early stages, for example, bringing close friends without the right skillset into the team, or pursuing cool ideas that don’t actually solve a problem,” says Lee.
Getting partners on board was initially challenging, as many other student groups and other universities are aiming to do the same thing. However, the GDSC program has the benefit of support from Google in terms of funding, expert technologists, and events.
“Over time, as our community grew, so did the interest of funding partners as we presented projects and startups that aren’t just side hustles or fun projects, but teams of students that are out to commit and achieve the real deal,” says Lee.
Historically, funds that have a connection with academic institutions have focused on commercializing research-based spin-outs and the IP transfer from the university to a business, for example, commercializing biotech or hard science initiatives like the Oxford vaccine. As a result, the focus of the narrative is typically centered around STEM-based projects or businesses with a technological or scientific breakthrough at the center of their solution.
“What we haven’t seen as much in the U.K. is a focus on alumni-founded businesses more generally, in the same way that this has been popularized in the U.S., for example, with the funds run by the likes of Alumni Ventures Group,” says Adam French.
Houghton Street Ventures is a newly established venture firm that will be investing in LSE alumni and student businesses, globally, at an early stage. “The vision is to be the glue to the LSE entrepreneurial ecosystem: stitching it all together to create a thriving community,” says Hannah Leach. “We work closely with existing student-focused initiatives and programs on campus, including LSE Generate, GSDC, Kickstart London, the Entrepreneurship Society, and the Data Science Society, to support and encourage the entrepreneurial DNA of the student body.”
The challenges faced by LSE alumni founders are the same as those faced by startups generally, including a high failure rate. However, as Leach explains, the platform being built at Houghton Street Ventures will give LSE alumni founders an advantage they never previously had through the value-add and access to the whole LSE community of angels, co-investors, and follow-on investors to get them their initial seed funding.
There is a consensus that universities should be providing more opportunities for students and alumni to connect to help them understand the industries they work in and share the problems professionals are facing. Students, too, are being urged to reach out themselves to their university’s alumni for their expertise and perspective.
Lee adds: “Partnerships between early entrepreneurs and veteran CEOs give students new perspectives on leadership, technology, and industry. We have yet to see the end result of the GDSC program, but one thing for sure is that Google, Houghton Street Ventures, and our partners are continuously investing and improving into the program to make it easier for students to break into technology and create solutions that matter.”