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New ZEAL Lab  Teaches Students Venture Capital Fundamentals

Mercury Fund and Detroit Innovate Offer Students Venture Capital Fundamentals in New ZEAL Lab

By Lori Atherton
Feb. 25, 2015

Learning to think like a lawyer is what students expect from law school, but what about learning to think like a venture capitalist? A new Michigan Law offering provided through a partnership with national and local venture capital firms Mercury Fund and Detroit Innovate is making it possible for students to learn the ins and outs of the venture capital world.

Launched in fall 2014, the ZEAL Venture Capital Lab offers students the opportunity to work on investment deals with Detroit Innovate and Mercury Fund. Students conduct market research, write investment committee memos, and sit in on investment calls and meetings, with the goal of aiding the venture capitalists at Detroit Innovate and Mercury Fund with their investment decisions.

"The bread and butter is that law students actually function as venture capitalists in assessing potential investments for the funds," said Clinical Assistant Professor Bryce Pilz, '00, who oversees the Law School's involvement in the lab. "They review pitch decks and financial documents, and meet with the entrepreneurs to learn more about their businesses. Along the way, we make sure the students learn the nuts and bolts of venture capital deals, how venture funds work, and startup business basics. Like our other experiential education programs at U-M, they are learning the most from their actual work."

Four students, selected from a pool of 30 applicants, are participating in the Venture Capital Lab, which has been kept small in size to accommodate the hands-on work the students are doing. Originally offered for one semester, it has been extended to a second term to give students more exposure to deal work, which 3L Sabrina Hadinoto appreciates.

Hadinoto applied for the lab to learn more about "what makes up a scalable, venture-backable company," and she hasn't been disappointed. "We've been involved in every aspect of deal flow, and the companies we look at are fascinating," she said. "Potential investments I have analyzed have run the gamut from predictive agricultural technology to a mobile app that creates price transparency for the unbanked population. The experience has far surpassed my expectations."

The Venture Capital Lab was created at the suggestion of Adrian Ohmer, '13, a principal at Detroit Innovate, who wished that similar hands-on venture capital experience was available to him as a law student. He mentioned his idea to Adrian Fortino, MBA '10, BSME, '00, whom he was working with at the time, and they approached Prof. Pilz about the opportunity, which allows them to serve as mentors for the students.

"I had a great Michigan Law education, but one thing that was lacking was access to primarily non-legal experiences, like venture capital firms," Ohmer said. "The lab is a way for me to give back to the Law School and to show students that a JD can be valuable outside of a career in law."

Prof. Pilz said an increasing number of students are entering law school with a desire to work in the entrepreneurship and venture capital fields and recognize that legal training can aid their work. "The problem solving, the pattern recognition, the understanding of the difference between a fact and an opinion—these are skills that are drilled into our law students, are used by entrepreneurs and investors on a daily basis, and aren't necessarily possessed by graduates of other schools," he said. "Even for those students that want to practice law after graduation, having a deep understanding of how venture capitalists work and think is an invaluable asset."

For Fortino, a partner at the Houston-based Mercury Fund, the real-world work done by the students has been just as valuable, and he's eager to begin interviewing the students who will participate in the Venture Capital Lab next fall.

"The students have been critical to our work at the funds," he said. "There are deals that wouldn't have been done as quickly or as effectively without their help. The students are very bright and ask a lot of great questions—they're everything you want as a teacher, and it's been fantastic working with them."

Prof. Pilz noted that the Law School's growing participation in the local entrepreneurial community as well as the spirit of mentorship highlighted by the involvement of Mercury Fund and Detroit Innovate makes the lab so special. "This program wouldn't exist if it weren't for alums like Adrian Ohmer and Adrian Fortino and their respective funds," he said. "It's their energy and genuine love of working with our students that makes this possible. Besides learning about venture capital, our students are absorbing that spirit, and it bodes well for this region."

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