Silicon Valley Schools Swap Galas for Venture Funds
Source: Fortune. Casualplayhub News adds summary, context, and editorial framing while linking back to the original report.
For decades, American private schools have raised money the old-fashioned way: silent auctions, annual giving campaigns, and a yearly gala complete with cocktails and canapes. But on the peninsula between San Francisco and Silicon Valley, a handful of schools are rewriting the playbook. Crystal Springs Uplands School, a private day school with 569 students, still plans to host its gala this year. Yet the main draw for fundraising has shifted to something far more ambitious: a miniature venture capital fund.
Crystal Springs is part of a small but expanding cohort of Silicon Valley schools that have built what amount to their own VC funds. These funds are capitalized through donations from the school community, guided and overseen by parent-investors from well-connected firms such as Lightspeed, Notable Capital, and Sequoia. They target early-stage, pre-IPO companies. The approach traces its roots to Saint Francis High School in Mountain View, where a $15,000 pre-IPO investment in Snap returned $34 million when the company went public in 2017. Nearly a decade later, with the IPO market heating up, several schools are sitting on private portfolios whose value will only crystallize when companies go public or experience 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 holding pre-IPO stakes in companies of that caliber, even a modest check written years ago could produce the kind of windfall Saint Francis saw with Snap. By any measure, this is a far cry from a bake sale.
The mechanics are straightforward, though the access and expertise required are anything but. A school sets aside a small pool of capital, donated from parents or alumni and never drawn from tuition or the operating endowment. A committee of volunteer investors vets potential deals 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 after his own children graduated. The fund started in the 1990s when two parents in venture capital contributed about $250,000 in seed money. Today, it is overseen by more than half a dozen investors from firms including Battery Ventures, Mayfield Fund, Meritech Capital Partners, Sequoia, and Lightspeed.
"We have a mix of people who have early stage and late-stage deal flow," Eggers said. "And we put it together, and we built a fund." He 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 cumulative lifetime returns around $50 million, but like other trustees and school officials, he declined to share specific investments. "We look a lot like an early stage VC fund," he said, "with a little bit of growth investing mixed in."
The schools have a major advantage over typical funds: the time and treasure required to manage investments are donated. Most venture funds charge management fees and pay investment professionals a share of profits, known as carried interest. "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 similar schools are 501(c)(3) nonprofit entities, they pay no capital gains tax on returns, meaning net returns are likely higher than those of a typical fund.
Crystal Springs has adopted a similar structure with its Crystal Growth Fund, according to 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 fund is only a few years old, conceived by a parent who proposed the structure. According to Crystal Springs' public records, through fiscal 2023, the school 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 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. Its 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, and is 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 these schools, the expertise among parents and alumni is 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, though he meets regularly with the group and stays abreast of their agenda. (Saint Francis is a nonprofit but the IRS classifies it as a subordinate, meaning it does not file 990 reports.) Curtis's focus is on where the returns go and how the program benefits students, teachers, and the community. The primary needs are tuition assistance, compensation for educators, and innovative programs or facility improvements.
The mini VC fund approach also creates a bridge between the companies the schools invest in, the VCs sourcing deals, and students interested in entrepreneurship and investing. Curtis has brought students into growth fund meetings and invited 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 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, inherited a fortunate situation. The school's leadership quickly agreed that 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.
One major barrier to replicating this model 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 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." Not all investments pay off, of course. Eggers noted the system is not perfect, but the point is to take calculated risks, which is why the checks are relatively small.
The second barrier is deal flow. Committees need access to high-quality, vetted investment opportunities, which means 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 acts as its own control, making the model easier to replicate in metro areas with reputable firms, such as Los Angeles, New York, Connecticut, and Chicago.
The VC approach is part of a broader shift in private school fundraising. 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 is significantly lower than other forms of fundraising, and they often require one or two staff members spending a significant portion of their time on the event instead of on education. Schools are also reckoning with the signal a high-priced gala ticket sends when not all community members can afford to attend. Crystal Springs, for instance, has turned to a once-yearly donor ask, noted Talbott.
Schools are not 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. None of the investments in Crystal Springs' nascent portfolio have yet gone public, said Talbott. He declined to name the companies 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 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."
Article commentary
The rise of in-house venture capital funds at Silicon Valley private schools represents a fascinating intersection of education, philanthropy, and high-stakes finance. It is a model born of unique geographic and demographic circumstances: a concentration of elite venture capitalists who are also parents, a culture of innovation, and a wealth of pre-IPO opportunities in the tech ecosystem. But while the success stories — particularly Saint Francis's $34 million Snap windfall — are compelling, the broader applicability and sustainability of this approach deserve careful scrutiny. On one level, the model is a brilliant adaptation of traditional fundraising. By leveraging donated expertise and tax-exempt status, these schools can achieve returns that would be impossible for a typical VC fund. The absence of fees and carried interest, combined with zero capital gains tax, creates a powerful financial advantage. Moreover, the funds align with the educational mission of the schools: they expose students to real-world entrepreneurship, provide networking opportunities, and generate resources for tuition assistance and teacher compensation. In a region where the cost of living is astronomical, such revenue streams can be transformative. Yet the model is not without significant barriers. The most obvious is access. The schools that have succeeded are those with deep ties to top-tier venture firms. Without a Barry Eggers or a similar figure willing to chair an advisory board for years, the deal flow necessary for consistent returns simply does not exist. This geographic and social exclusivity means the model is unlikely to scale beyond affluent communities with strong VC ecosystems. Schools in other parts of the country may find it difficult to replicate, even with families in finance, because the quality of deal flow in Silicon Valley is unmatched. Another challenge is the time horizon. Venture capital is a long-term game; returns often take a decade to materialize. Schools, by contrast, operate on annual budgets with immediate needs — salaries, facilities, financial aid. The patience required to wait for a payout while maintaining operational stability is a luxury not every institution can afford. Eggers and Curtis both emphasize this tension. The J-curve of venture returns, with years of negative cash flow, can be a hard sell for school boards focused on the present. There is also the inherent risk. The Snap investment was a spectacular outlier — a 2,000x return. Most VC investments fail or return only modest gains. The schools are prudent in keeping check sizes small, but even a string of moderate failures could erode donor confidence. The funds rely on the goodwill and expertise of volunteers, and if returns become mediocre, the enthusiasm may wane. Furthermore, the lack of transparency around specific investments, while understandable for competitive reasons, makes it difficult to evaluate the true performance of these funds. From a broader perspective, the trend signals a shift in how wealthy private schools think about fundraising. The gala, once a staple, is being replaced by more efficient, higher-return mechanisms. This reflects a broader move toward donor-advised funds and impact investing in the nonprofit sector. But it also raises questions about equity. The schools that can run VC funds are those already serving affluent families; the windfalls primarily benefit the already privileged. While tuition assistance is a common use of proceeds, the model itself reinforces the concentration of capital in elite institutions. Finally, the phenomenon underscores a larger cultural shift in Silicon Valley: the blurring of lines between philanthropy and investment. These schools are not merely asking for donations; they are offering donors a chance to participate in the tech economy in a tax-advantaged way. This is a savvy appeal to the ethos of the region, but it also risks commodifying education. When a school's financial health becomes tied to the IPO market, it may create new vulnerabilities. A downturn in tech could leave these funds exposed. Nonetheless, the model is a compelling case study in innovation. It works because of a specific confluence of talent, timing, and trust. For other schools, the lesson may not be to copy the fund directly, but to think creatively about how to tap into the unique expertise of their communities. The real value, as Eggers suggests, is building something permanent. Whether that permanence can survive the volatility of the market remains to be seen.