Seed Capital From Angel Investors: Lewis Hower, Executive Director, University Impact Fund (Part 1)

By guest authors Irina Patterson and Candice Arnold

This is the thirty-first interview in our series on financing for entrepreneurs. I am talking to Lewis Hower, executive director of University Impact Fund, which bills itself as the first student-run social impact seed financing organization for entrepreneurs that intends to deliver a return to its investors.

Based in Salt Lake City, the fund plans to use local students to source and analyze deals that address socioeconomic issues, such as clean water, waste management, and alternative energy. The fund size is planned to be at about $10 million to $15 million when fundraising is completed.

Irina: Hi, Lewis. Why don’t you tell us who you are and what you do?

Lewis: I’m the executive director of a program called the University Impact Fund based in Salt Lake City, Utah. We are a student-run impact investing and consulting organization that is external to any one particular university; we’re a fully separate organization.

We attract students from the University of Utah, Westminster College, and BYU (Brigham Young University). These schools are the main schools in the Salt Lake City area. We provide a hands-on experiential learning education for university students to understand both venture investing and the social and environmental impact world.

Irina: Could you tell us briefly about your personal background?

Lewis: I’m a bioengineer by background and education. I did a lot of biomedical research and analysis, mainly for wound healing products and things of that nature. After that, I had a short period working for a foundation that did joint business ventures between Israelis and Palestinians in the Middle East, using communication and then business – following the communication – as a method and tool for collaboration and community rebuilding.

At that time, I was brought on board to an organization called the Unitus Investment Group, which was a for-profit holding company for a lot of microfinance focused and related opportunities around the world.

So, we had a couple of different organizations that we started and spun out of an organization called Unitus, Inc., one of which was Unitus Capital, which is a merchant bank based in Bangalore that’s focused on base-of-the-pyramid initiatives.

We also did a fund called the Sorenson Housing Opportunity Fund, which is an affordable housing fund for the working poor of India.

We have a micro-banking project in China and a myriad of others – really a holding company-type platform looking at both research and seeding and sponsoring new managers and new organizations, all with a for-profit mindset to address some of the biggest issues at the base of the pyramid.

The group behind the Unitus Investment Group are some of the managing directors and founders of Bain Capital, the Sorenson family of companies, Geoff Woolley, who started Dominion Ventures, all coming with a for-profit, private equity background and saying, “How do we apply those same techniques to the impact investing world?”

So, we created the University Impact Fund earlier this year, modeling it after the University Venture Fund. They are the largest and longest standing student-run venture fund in the country. They’ve been around since about 2002 and successfully manage $18.5 million.

We’re able to take that model, platform, and how the organization is run and focus ourselves by understanding the key components of business analysis, valuation, and all of those elements. But now we’re layering social environmental impact on top of that to provide another opportunity for these students.

Irina: During which years were you involved with those organizations?

Lewis: I’ve been in the impact investing world for, it’ll be about four years coming up this winter, working with Unitus Investment Group and Sorenson Housing Opportunity Fund and those kind of [organizations], all working for the same group of individuals for that entire time. I just transitioned and moved out here to Salt Lake City in May 2010, which is when we officially launched and laid the initial groundwork for the University Impact Fund.

Irina: What is the size of the University Impact Fund?

Lewis: We are in the early stages of our development, so we do not have a fund that is fully raised right now. We are closing [an] initial capacity building round likely between $600,000 and $1 million, which will afford us the opportunity and ability to collectively pool and raise a fund that will likely target about $10 million to $15 million.