Gail Gilbert Ball, a 1979 Wharton School alumna, spends 80 percent of any given day working to raise capital for Chestnut Street Ventures, an investment fund solely for Penn grads, by Penn grads.

Only two months in as the firm’s managing partner, Ball has already brought to the table about 35 accredited investors—all with Penn ties—who have contributed nearly $2 million to the annual fund. She’s also already led Chestnut Street Venture’s first investment in Penn Engineering Alumnus David Lyman’s BetterView, a San Francisco-based technology company.

“We’re on track to raise $5 million this year, just for our first fund,” Ball says, while chatting on campus between meetings in Center City and at the Pennovation Center. “With an average $200,000 check for different entrepreneurial endeavors by Penn alumni, that’s at least 25 companies we’ll be able to invest in.”

But finding accredited investors isn’t the hard part, says Ball, who has spent 30 years working in financial technology, most recently as chief operating officer of Bancorp. In accordance with regulation, the fund caps at 99 limited partners, so she’s already a third of the way there. What’s more challenging is delivering on the strict initiative to be diverse in all the investments that are made.

“Making these relatively small investments of $200,000, it will really let us diversify across industry, across geography, and company development stage—and we all know that diversifying means de-risking,” she explains. “But, we must be sure to do the absolute best job in picking investments, so we have to have a gigantic funnel of transactions that we are looking at, at any one time.”

With this in mind, Ball says she expects to always have about 200 deals regularly in the queue. Helping her to make the best investment decisions will be a vice president for investments, which she is currently interviewing candidates for. She has also built a diverse team of seven Penn graduates, from several colleges within the University and from all parts of the world, to serve on her investment committee.

Although 20 percent of the investments will be allocated to early-stage companies, the majority will go to late-stage projects—another advantage for the risk-averse. The Chestnut Street Ventures’ model tacks investments alongside top-tier venture funds, and most are experts in the fields they are investing in. This means Chestnut Street Ventures won’t lead deals, price rounds, or have its members take board seats.
“We’re fast and frictionless,” Ball notes. “We’re coming quickly to the table, we don’t ask for board seats, we don’t dictate the terms. We are just following the lead investor. But we are bringing with us the whole wherewithal of the Penn entrepreneurial community.”

Conversely, investors are attracted to Chestnut Street Ventures for its lower initial investment levels ranging from $25,000 to $500,000.

“People who may think about angel investing, they may invest $5,000 in three or four different companies. But it’s risky because they are super early, and it’s clearly going to be concentrated into one industry, which is also risky,” Ball explains. “What we are offering to someone with as little as $25,000-$500,000 is to invest in something they can’t get anywhere else.”

The model of Chestnut Street Ventures is similar to the rest of the funds under parent company Launch Angels, which was started three years ago by Dartmouth grads. All the existing funds—including ones for Dartmouth, Harvard, Yale, and Massachusetts Institute of Technology graduates—are private, for profit, and not affiliated with their respective universities.

Although each school fund differs due to campus culture, there’s one thing that holds true for them all: There’s no such bond as that of alumni.

“Having a college affinity becomes part of your DNA, in which giving back is meaningful,” Ball says. “My job boils down to creating a community that’s valued by people, and having that community realize its promise of doing well and doing good.”