Dorm Room Fund uses undergraduate investors to promote student entrepreneurship

When FiscalNote, a company founded by Tim Hwang ’14, recently raised $1.4 million in funding, the company's list of backers included Dallas Mavericks owner Mark Cuban and the venture capital firm New Enterprises Associates. But among the list of high-powered investors was a more unexpected source of support, coming from Hwang's own Princeton classmates, Taylor Francis ’14 and Raymond Zhong ’14 by way of theDorm Room Fund, a venture fund run by student entrepreneurs at various universities across the United States.

Started by First Round Capital— a company that connects and invests in entrepreneurs — the Dorm Room Fund has been investing in various student entrepreneurs in the New York area since 2012. It also operates in the Philadelphia and San Francisco areas, with a branch in Boston coming soon. The fund relies on undergraduate student investors to identify potentially successful student entrepreneurs at their universities.

“The core belief is that students can stay in school and start companies if they get a little bit of support, both financially and in terms of advice,” Francis explained. “The other big idea behind the Dorm Room Fund is that the people who are best placed to find the best student entrepreneurs are their fellow students.”

First Round Capital selected student investors via an application and interview, according to Cece Cheng ’08, director of the Dorm Room Fund. The student investment team will choose who will replace the current members as they graduate, she explained.

The idea that student entrepreneurs do not have to choose between being enrolled in school and being part of a start-up is different from that motivating many other student-entrepreneur fellowships and grants, such as the Thiel Fellowship, which offers students $100,000 to drop out of school and start a company, Francis explained. Each branch of the Dorm Room Fund is given $500,000 to invest in undergraduate entrepreneurs, totaling $2 million across the four different branches. The average investment the Dorm Room Fund makes in a single start-up is about $20,000, according to its website.

FiscalNote was the first Dorm Room Fund investment made at the University. The start-up aims to provide real-time government analytics and actionable data for enterprises regarding relevant legislature that would otherwise not be easily accessible and would require the work of many entry-level assistants to compile, Hwang explained.

FiscalNote is on track to raise another $8 million in July, according to Hwang, and will probably expand from 14 to 20 employees by the end of the calendar year.

“I’m pretty confident that a little after graduation I’ll be able to ramp [FiscalNote] up to 100 people and start expanding this company out globally,” Hwang said.

In addition to providing initial seed financing to the start-ups, the Dorm Room Fund intends to provide mentorship to the aspiring student entrepreneurs. Over 60 entrepreneurs have joined the Dorm Room Fund as resident advisers already, according to Cheng. Many of these advisers are alumni from universities in which the Dorm Room Fund has student investors.

“There are two main ways that we see [resident advisers] interacting with the founders [student entrepreneurs like Hwang]. One is direct mentoring. We’ll be pairing RAs with a student founder … that shares a similar background or is working on a similar problem. The second way the RA will be engaged with students will be via local DRF events; we’ll also be hosting talks,” Cheng said.

Some Princeton alumni who are currently featured on the Dorm Room Fund’s website as resident advisers are Jon Steinberg ’99, president and chief operating officer of BuzzFeed; Brian O’Kelley ’99, chief executive officer of AppNexus; and Evan Baehr ’05, cofounder of Outbox.

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“In subsequent years [after graduation], I got to know Harvard, Stanford and MIT’s undergraduate culture, all of which are amazingly celebratory of entrepreneurship. From my experience at Princeton, it was a place where entrepreneurship is at best not understood and at worst, mocked, and that’s really disturbing. The Dorm Room Fund, from my perspective, is a way I can help more undergraduates at Princeton have a shot and think it is awesome to start a company,” Baehr said.