Forget the gala, these Silicon Valley schools run their own venture capital funds

Most American private schools still raise money the old-fashioned way—silent auctions, annual giving, and a yearly gala with mixed drinks and canapés.  

Crystal Springs Uplands School, a 569-student private day school located on the peninsula between San Francisco and Silicon Valley, still plans to throw a gala this year, but it isn’t the main draw for raising money. The fundraising, increasingly, comes from somewhere else. 

Crystal Springs is one of a small but growing number of Silicon Valley private schools that have built what amount to miniature venture capital funds. The funds are capitalized with donations from the school community, guided and overseen by parent-investors from well-connected firms such as Lightspeed, Notable Capital, and Sequoia, and are aimed at early-stage, pre-IPO companies. 

The approach was originated by Saint Francis High School in Mountain View, where a $15,000 pre-IPO investment in Snap returned $34 million when Snap went public in 2017. Nearly a decade later, with the IPO market heating up, a handful of schools are sitting on private portfolios whose value won’t be known until the companies go public or have other liquidity events. 

SpaceX’s June debut on the Nasdaq—the largest IPO in history at a valuation north of $2 trillion—signaled that the era of massive tech companies staying private indefinitely may be ending. Anthropic and OpenAI are widely expected to follow SpaceX founder Elon Musk into the public markets. For schools with pre-IPO stakes in companies of that caliber, even a small check written years ago could produce the kind of windfall that Saint Francis saw with Snap.

By any measure, we’re a long way from a bake sale. 

A mini VC fund

The mechanics are fairly straightforward, although the access and expertise required to make these funds work are anything but. A school sets aside a small pool of capital—donated from parents or alumni, and never drawn from tuition revenue or the operating endowment—and a committee of volunteer investors vets potential investments and decides how to proceed. 

At Saint Francis, the vehicle is called the growth fund. Barry Eggers, co-founder of Lightspeed Venture Partners, has chaired the advisory board for years, even though his own children have long since graduated. The fund was started in the 1990s by two parents in the venture capital industry who contributed about $250,000 in seed money. Today, the fund is overseen by more than half a dozen investors from firms including Battery Ventures, Mayfield Fund, Meritech Capital Partners, and Sequoia, as well as Lightspeed. 

“We have a mix of people who have early stage and late-stage deal flow,” said Eggers, “And we put it together, and we built a fund.”

Eggers generally asks each member to bring one deal a year. The fund invests in roughly 10 companies annually at $25,000 to $50,000 apiece. He estimates the fund has seen roughly $50 million in cumulative lifetime returns, but like other trustees and school officials, he declined to share specific investments.

“We look a lot like an early stage VC fund,” said Eggers. “With a little bit of growth investing mixed in.”

The schools have a major advantage over a typical fund because the time and treasure required to man the investments are donated. Most venture funds have management fees and pay investment professionals a share of the profits—known as “carried interest,” or “carry”—that’s based on long-term returns. “There are no fees and carry here,” said Eggers. “We’re volunteering our time, and we’re not taking any carry.”

And because Saint Francis and other similar schools are 501(c)(3) nonprofit entities, they don’t pay capital gains tax on the returns, meaning their net returns are likely higher than what you would see in a typical fund. 

Crystal Springs has adopted a similar structure with its Crystal Growth Fund, said Brian Talbott, the school’s chief financial and operating officer. “We’ll take the money that the donors have given us and invest it through the parents’ or alums’ funds into those pre-IPO investments,” said Talbott. 

Parents at venture firms can also donate money or direct small portions of their personal investment allocations in deals to the school. The Crystal Springs fund is only a few years old, conceived by a parent who proposed the structure. According to Crystal Springs’ public records, through fiscal 2023, Crystal Springs held no private investments. By June 2025, it carried approximately $1.75 million in private equity investments out of a total $61.1 million that includes investments in mutual funds, treasury bills, and equities.

“They are providing access for us that we likely would not have otherwise,” said Talbott. 

Menlo School, a private college-prep school in Atherton with about 800 students, has its own version of the model. The school’s most recent 990 filing, covering the year ended June 30, 2025, shows a Menlo Venture Capital Endowment comprising approximately 36 individual investments in venture capital partnerships and early stage companies. The MVCE totals less than $1 million—a fraction of Menlo’s $122.6 million endowment—invested through established managers and the school’s 23-member investment oversight board. The board includes school leaders and trustees from Bessemer Venture Partners, Scale Venture Partners, and Sobrato Capital.

For the schools, the expertise among the parents and alumni are key. Jason Curtis, president of Saint Francis, notes that he is an educator, not an investor. “That’s not my skill set,” said Curtis. He relies on the committee to vet investment deals, although he meets regularly with the group and school leaders and stays abreast of their investment agenda. (Saint Francis is a nonprofit but the IRS classifies it as a subordinate, which means it doesn’t file 990 reports.)

Curtis’s focus is on where the returns go and how the program can benefit students, teachers, and the school community. The primary needs are tuition assistance for families that need it, which always gets the largest share; compensation for educators, including bonuses that help teachers afford to live in Silicon Valley; and innovative new programs or facility improvements, Curtis said. 

The mini VC fund approach also creates a bridge between the companies the schools are investing in, the VCs sourcing the deal flow, and students who might be interested in learning about the entrepreneurship and investments that happen in Silicon Valley. Curtis has brought students into growth fund meetings, and invited the portfolio companies to campus. 

“The opportunity to expose our students to people in business they might never meet, or might not know anything about, is really remarkable at this age,” said Curtis. “And then to actually have students interact with them is enormously important.”

The Saint Francis Snap investment is now Silicon Valley lore. In 2012, the Saint Francis growth fund invested $15,000 in Snap at Eggers’ urging. His firm, Lightspeed, had been one of the company’s first outside investors, and he noticed his own children sending snaps on the app. When Snap went public in March 2017, the school’s stake was worth about $34 million. 

“Snap was an anomaly—a happy anomaly—for us,” said Eggers. “We made over 2,000 times our money on it.”

Simon Chiu, who was president of Saint Francis at the time, stepped into what he described as a fortunate inheritance. The school’s leadership quickly agreed the bulk of the Snap windfall would go into the endowment and a dedicated pool was drawn up to fund retention bonuses for teachers. Saint Francis also recently completed a multi-million capital campaign that included gains from the Snap investment. 

Courtesy of HMC Architects and Saint Francis High School

Patience pays off

One of the major barriers to replicating the venture-fund-within-a-school approach is that schools run on annual budgets while venture returns often follow a J-curve with years of negative cash flow before positive gains emerge. “It could be five years, it could be eight years before you see returns,” Eggers said. “A lot of schools find that hard, because they have to focus on the here and now.”

The institutional challenge requires thinking in chunks of decades rather than school years. “It requires a lot of patience,” said Curtis. “And the truth is, all of us as schools, we have immediate needs.”

And of course not all investments pay off. Eggers noted the system isn’t perfect, but said the point is to take calculated risks—which is why the checks are relatively small. 

The second barrier is the deal flow itself. Committees need access to high quality, vetted investment opportunities, which means they need access to some of the most successful VC funds. 

“If a deal is good enough for Sequoia, Meritech, Battery, Mayfield, or Lightspeed, then it’s good enough for Saint Francis,” said Eggers. The peer group is its own control, but it also makes the model easier to replicate in metro areas that have reputable firms like Los Angeles, New York, Connecticut and Chicago. 

The VC approach is part of a broader shift in private schools’ fundraising practices. Some have begun moving away from annual event-based fundraisers like galas, said Laura McGarry, managing principal at the nonprofit fundraising consulting firm Graham-Pelton. The return on investment for galas—which are expensive to put on—is significantly lower than other forms of fundraising, and it often requires one or two staff members spending a significant portion of  their time working on the event, instead of focusing on education. Schools are also reckoning with the signal a high-priced ticket to a gala sends, when all members of a community can’t afford to attend. 

Crystal Springs, for instance, has turned to a once-yearly ask from donors to help fundraise for the school, noted Talbott. 

Schools aren’t the only nonprofits reaping gains from IPOs. When Figma went public in July 2025, the largest selling shareholder was the Marin Community Foundation, a Bay Area nonprofit focused on affordable housing that had received about a third of cofounder Evan Wallace’s shares before the offering. The nonprofit made $440 million at the IPO. 

Waiting for companies to “graduate” in an IPO 

None of the investments in Crystal Springs’ nascent portfolio have yet gone public, said Talbott. He declined to name the companies the school has invested in but acknowledged that some may be approaching the public markets. “Some of the investments are likely closer to potential IPOs than others,” said Talbott. 

Eggers said schools from the East Coast to Los Angeles have called asking how to replicate the Saint Francis model, and others schools in the Bay Area have explored it. McGarry has seen the most interest in New York and Connecticut, where a higher concentration of families work in finance and private equity.

Eggers tells all of them that opportunistic one-offs like Snap are great, but the real value comes from building something permanent, particularly as more companies stay private for longer. “I’m talking about trying to build a fund that is ongoing,” said Eggers. “This is a way for high schools to take advantage of that, and really participate in it.”

This story was originally featured on Fortune.com