Bake sales and car washes? Not for one Silicon Valley parochial high school that hit it big this week and, by doing so, highlighted anew gaping economic disparities in the region.
St. Francis High School in Mountain View parlayed a $15,000 investment in the company that developed the Snapchat app into a windfall of at least $24 million, capitalizing on a unique venture capital fund set up by the school’s investment-savvy parents.
The fund paid off when Snap Inc. began selling shares to the public Thursday and the school sold about 1.4 million of the 2.1 million shares at $17 each. It’s holding the remaining 700,000 shares, which were valued at about $19 million Friday.
“Silicon Valley is a pretty amazing place to live,” school President Simon Chiu said. “This obviously couldn’t have happened anywhere else.”
St. Francis High School launched the fund in 1990 at the urging of two of the many venture capitalists with children attending the school. The fund’s aim is to tag along with deep-pocketed investors when they make big bets on startup companies. The school takes a small sliver of a venture capitalist’s bigger investment in a startup company.
Chiu and other educators say they know of no other school with a similar fundraising scheme.
Few, if any other schools, have that sort of advantage, said Stephen Andriole, a professor of business, accountancy and information systems at the Villanova School of Business in Pennsylvania.
“The only way to do this is through a personal relationship,” he said. “The probability of success is quite low.”
About 10 miles north, in East Palo Alto, educators are focused on raising graduation levels in a predominantly Latino community with high pockets of poverty. The city of about 30,000 just a few miles from Stanford University has succeeded in lowering a staggeringly high homicide rate in the early…