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Stanford Report, March 11, 1998

Ventures Program receives full funding: 3/98

Financial stability for high-tech entrepreneurship program


An experimental program in the School of Engineering that teaches about and studies entrepreneurship in high-technology startups has become a permanent feature in Stanford's curricular landscape.

The program, called the Stanford Technology Ventures Program (STVP), has now accumulated enough financial backing to fully fund its operations: $1.5 million in expendable gifts for five years and $3.5 million in endowed gifts. A portion of this funding was used to endow the director's position, resulting in Tom Byers' appointment as associate professor in industrial engineering and engineering management.

"We see this program as a terrific asset to the high-tech environment in which we live and on which the world depends," says John Hennessy, dean of Stanford's School of Engineering. "The quality of the program has been validated by the caliber of the foundations, entrepreneurs and venture capitalists who are supporting its efforts. STVP puts Stanford at the forefront of university efforts to teach entrepreneurship rather than leaving students to learn this increasingly important skill set on their own."

In addition to Byers, the key industrial engineering faculty participating in the program are professors Stephen Barley, Kathy Eisenhardt and Robert Sutton; consulting associate professors Thomas Kosnik and Michael Lyons; and consulting lecturers Douglas MacKenzie and Audrey MacLean.

STVP's key financial backers, providing a total of $4 million, are the Ewing Marion Kauffman Foundation, which pursues a vision of accelerating entrepreneurship in America; the Price Institute for Entrepreneurial Studies; Mayfield Fund, a venture capital partnership with historic ties to Stanford's School of Engineering; and Reed Hastings, founder of Pure Software (now part of Rational Software).

In addition, more than $1 million came from the individual donations of the following entrepreneurs and venture capitalists: Audrey MacLean and Michael Clair; Tom and Barbara Boyd Proulx; Michael Boich; Jim Anderson; Jim Katzman; Geoff and Amy Yang; Jim Breyer; Kleiner, Perkins, Caufield & Byers; and the Stanford Engineering Venture Fund.

The heart of STVP is its co-op program. This is a work/study program that selects and matches Stanford engineering students ­ now called Mayfield Fellows ­ for paid summer work in startup companies. Each year the three-quarter program recruits a dozen highly motivated seniors from a number of engineering departments. In addition to attracting top engineering students, the program has drawn a number of the hottest Silicon Valley startups, who agree to pay the students a competitive wage and to spend a significant amount of time supervising and training them.

Although the on-the-job experience during the summer is the unique feature of the program, it also includes a preparatory course in spring quarter that includes management theory and case studies of startups. In the fall quarter, the students prepare formal presentations about their internships that they give to the group with their company mentors in attendance.

From the beginning, both the students and the company participants have rated the co-op experience highly.

STVP has developed two other classes as well. Technology Venture Formation (Industrial Engineering 273) focuses on the creation of new high-tech ventures. The focus of the graduate course is the preparation of business plans for high-tech startups. The second class is a weekly seminar series (Industrial Engineering 292) that features distinguished speakers from Silicon Valley and other regions who discuss high-technology entrepreneurship and strategic management.

The program also includes a research component. "Understanding the successes that Stanford faculty and students have had in starting high-technology companies such as Hewlett-Packard, Cisco Systems, and Yahoo!, codifying that knowledge and disseminating it to future generations of entrepreneurs is an opportunity and obligation that we must seize," Byers says.

STVP is attempting to fulfill this obligation by sponsoring doctoral dissertations dealing with high-tech entrepreneurship. Current research projects include: newcomer experiences in high-tech startups by Keith Rollag; venture capital funding decisions by Bart Balocki; high-tech ventures within established companies by Quintus Jett; and complexity theory applied to entrepreneurship by Yee Lee.

The program's new status will not mean a large increase in the number of students accepted for the co-op program. It does mean a significant increase in activities in other areas. Three new courses are planned for the coming year.

In addition to the academic articles that result from sponsored research, program participants also plan to create a set of applied articles on a number of topics. They also will produce a handbook on high-technology entrepreneurship for use as a textbook and a general resource that will include chapters by top Silicon Valley entrepreneurs.

Finally, the program will begin producing case studies of Silicon Valley startups that will be published and distributed in conjunction with the Harvard Business School Press. SR