How is Reach Capital different from other venture capital firms? First, it’s located in a cool loft space in downtown Palo Alto. Second, it’s forging a new model for “VC” that combines a drive for profit with a desire to make a positive impact on education. Third, its leadership team is diverse in age, race and gender. Finally, its most recent investors include the people who brought us Elmo and Big Bird (but more on that later…).
Merging profits and impact through educational technology
Jim Lobdell and Shauntel Poulson of Reach Capital.
“Like a traditional ‘VC,’ Reach is trying to return investment on capital,” said Shauntel Poulson, Reach Capital’s co-founder and general partner, “But we do it by investing in ed tech entrepreneurs that are mission-driven and focused on more than just bottom line returns.”
Reach Capital evolved from a $12 million seed fund started by Jennifer Carolan and Wayee Chu through the New Schools Venture Fund in 2012. The experience was so successful that they spun Reach Capital into a separate organization in 2015.
Deploying over $50 million to solve education challenges
Reach Capital staff in their downtown Palo Alto office.
With over $50 million in its fund, Reach Capital has some serious resources to invest toward its stated mission of, “seeding the most inspirational, uplifting and engaging educational tools which help educators and families realize children’s full potential.”
Reach Capital also has recruited a refreshingly diverse team whose experience includes classroom teaching, product management, gaming and engineering.
One thing everyone at Reach shares: a passion for making a difference for schools and children. Explained Shauntel Poulson, “As an African American, I want to see educational opportunities come to people of all backgrounds. Exploring how we can support companies that bridge the gap and improve access is fulfilling for me professionally and personally.”
Wayee Chu, Reach Capital Partner
Can ed tech make a difference?
So how can investing in ed tech matter when American public schools are more segregated than 40 years ago and the achievement gap between underserved and privileged children continues to grow?
As explained by Reach Capital’s co-founder, Jennifer Carolan in a recent interview on EdSurge, there are three ways ed tech innovations can help: first, distribute ideas in a fast and frictionless manner; second, connect students to mentors, and third, make new ideas and resources accessible to those isolated by poverty or geography.
In addition, Reach is funding ed tech ideas that help teachers differentiate instruction and personalize learning, according to Shauntel Poulson.
Innovative companies using technology to make a difference
A glimpse at a few of the companies in Reach Capital’s portfolio reveals how the firm is investing in ideas that help schools, teachers and students solve key challenges. For example…
- Class Dojo is an application used by millions of teachers to communicate in real time with parents and motivate students to stay focused on learning.
- Nepris facilitates virtual interactions that allow children anywhere to learn real world skills from STEM professionals in fields such as engineering and research.
Ed tech startup Kaizena is being incubated in the Reach Capital Palo Alto office
- Newsela publishes high-interest news articles daily for grades 2-12 using a text-leveling process that allows students to access content about current events, no matter what their reading level.
- Zeal connects students with ‘math coaches’ that help children address skill gaps and make progress towards grade level expectations.
The Sesame Street Connection
So where does Big Bird come in? Reach Capital recently announced an investment from Sesame Ventures, the new venture effort by the company that created the fabled children’s show Sesame Street, which was covered by the “New Yorker Magazine“.
photo courtesy of HBO
As described by Jennifer Carolan on the Reach Capital blog, the fund sees a connection between Joan Cooney’s original vision for Sesame Street and the potential for ed tech today: “The prescient Cooney saw an opportunity — she envisioned how television might become a medium to support the emotional and intellectual development of children, especially the underserved. Today the same opportunity exists. The technology is different, with mobile devices and the internet rather than TVs at the frontier, but the issues are analogous.”
What’s the bottom line for Reach Capital?
The founders of Reach Capital are clear that they are a traditional VC in one key way: they are trying to return capital for their investors. But profit alone is not enough. “We are making decisions based on impact and financial returns,” said Shauntel Poulson. “It’s not an either/or approach- we want both. And we are lucky to have investors who are share our priorities and are willing to put impact before short term profits.”
How to learn more about Reach Capital
Visit the Reach Capital website at www.reachcap.org to learn more about the history of the fund, its founders, its portfolio companies and its unique approach to investing.
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