MBA-Managed Venture Capital Fund Earns 55 Percent On Early Stage Investment

UNIVERSITY PARK, PA (June 5, 2008) – The Garber Venture Capital Fund at Penn State's Smeal College of Business has sold its total holdings of 150,000 shares in Schoolwires Inc. for a total return on invested capital of about 55 percent.

Schoolwires, which was founded by Smeal alumnus Ed Marflak, offers a complete suite of online products and related services designed to meet the needs of K-12 schools, and the students, parents, and teachers that they serve. Schoolwires now serves more than 2,000 schools and an estimated 2 million students, parents, teachers, and administrators in 40 U.S. states and Mexico. The company, which was recently ranked No. 174 on the Inc. 5,000, has more than doubled sales annually for each of the last three years running.

The Garber Fund, a $5 million MBA student-managed fund at Smeal, invested at the early stages of the company's growth during both the seed and 'A' rounds according to the fund's investment strategies.

The fund agreed to sell its stock to existing shareholders who have the ability and intent to fund the company further to sustain its rapid growth. The Garber Fund operates as an open-ended fund and the proceeds therefore can be used to invest in other early stage companies.

This transaction is the first exit for the fund which to date has closed investments in four companies with a fifth under a term sheet agreement. 

The Garber Fund is used within a course environment for Smeal MBA students to experience first hand all aspects of venture capital investment, including deal sourcing, due diligence, term sheet negotiations, closing, monitoring investments, engineering exits, and managing the portfolio. 

"Making real investments in early stage ventures after going through a rigorous venture capital process is the best way for students to learn the subtleties of early stage investing," says Anthony Warren, director of Smeal's Farrell Center for Corporate Innovation and Entrepreneurship. "Continual involvement in the company also provides first-hand knowledge of the extreme ups and downs of start-ups before they reach stable sustainable growth."

About The Garber Venture Capital Fund
The Garber Fund was established in 1999 with a $5 million commitment from Penn State alumnus John Garber and his wife Bette to bring reality to the teaching of entrepreneurship and venture capital. The fund is part of the Nittany Lion Venture Capital Association (NLVC), an MBA student-run management group that works with small companies and other investment groups in early stage business planning, execution, and due-diligence assignments. NLVC forms part of Smeal's highly acclaimed entrepreneurship program, in which students are immersed in real-life situations throughout their studies.

Smeal is also home to the Nittany Lion Fund LLC, a $5 million student-managed investment portfolio with more than 60 private investors, making the college one of only a handful of business schools that have large student-managed funds for investment in both private and public equities embedded in their academic programs.

For more information on Nittany Lion Venture Capital or the Penn State Entrepreneurs Network, contact Anthony Warren at 814-865-4593.