the role of capital in education innovation
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Percentage of Sector GDP vs VC Investment
Education is the third largest segment of the economy, yet has been significantly under-represented in venture
Source: World Economic Outlook database, Centers for Medicare & Medicaid Services, US Department of Energy, UN Human Development report, PWC / NVCA “Money Tree Report”, BMO Capital Markets “Education & Training”, World Bank Study
60% ICT
31% Health10% Alt Energy ~0% Education
% of total VC investment
0%
15%
30%
45%
60%
IT Energy Education
% GDP %VC
% of US economy
58% other
17% Health
9% Energy
8% ICT
8% Education
$53 Trillion in Managed Assets$200 Billion in Venture Capital
$3 Trillion in Private Equity
> $2 Billion in Education Ventures
$212 Trillion in Global Assets
.0001% of Capital goes to Innovation in Education
$141 Billion in High-
Frequency Trading 73% of trading volume
$2.2 Trillion in Hedge Funds
“A new breed of trader had emerged who focused on gaming the plumbing itself, exploiting complex loopholes and quirks inside the blueprints like card counters ferreting out weaknesses in a blackjack dealer’s hand.”
“Because hedge fund managers make speculative investments, these funds can carry more risk than the overall market”
•Global Macro
•Directional
•Market Neutral
•Event Driven
Some capital pools seem far away from value creation
Private Equity is lost
“More Money Than They Know What to Do With” - The New York Times
$500 Billion in Private Equity has nowhere to go.
Extractive Actively seeks to extract value out of calculable assets
Migratory Searches for unfair returns by gaming the system
Productive Invests in long-term strategies proposed by entrepreneurs and management
Visionary Seeks to invest in entrepreneurs and management pursuing a vision for the future
Let’s simplify
Clayton Christensen’s definitions according to the “doctrine of new finance.”
Extractive Actively seeks to extract value out of assets
Migratory Searches for unfair returns by gaming the system
Productive Invests in long-term strategies proposed by entrepreneurs and management
Visionary Seeks to invest in entrepreneurs and management pursuing a vision for the future
We need to think of capital as having intentions.
$4.6 Trillion in Sovereign Wealth
$583 Billion in Philanthropic
Assets
$411 Billion in University
Endowments
$1.14 Trillion in (Funded) Teacher
Retirement Assets (US)
There are capital sources that have an interest...
Crowdfunding models can unlock larger pools
$217B in Individual Giving
$42B in Foundation Giving 35% in Top 1% Assets
53% in Next 19% Assets
Grow the pie.