Student-led Social Venture Fund Invests in Powerhouse Dynamics

Shannon Beeman
April 17, 2014

The Social Venture Fund, the nation’s first student-led impact investing fund, has participated in a bridge financing round for Powerhouse Dynamics, a cloud-based provider of enterprise energy and asset management solutions. Powerhouse Dynamics secured Series A financing from a diverse group of early stage venture capital firms and angel groups. This marks the student-led fund’s fourth investment.

The Social Venture Fund makes early-stage investments of up to $100,000 in sustainable and innovative, for-profit organizations that deliver financial returns and place the generation of a significant social impact at the heart of their mission. It is managed by Uday Rajan, professor of finance at the Ross School of Business and by a team of 30-35 MBA students, many of whom are pursing dual-degrees with education, environment, health, law and public policy.

A team of seven students led by Sid Roy, MBA ’14 and Will Kletter, MBA/MS ’16, sourced the deal and conducted in-depth due diligence on the company.

“Our ability to leverage the expertise of our Erb dual degree members was immensely helpful in the due diligence process and speaks to the unique value that the Ross program can provide to Powerhouse Dynamics and cleantech firms moving forward,” said Roy.

Kletter adds, “Our decision to invest in Powerhouse Dynamics was largely driven by the management team’s demonstrated ability to effectively deploy its patented technology in a large and growing market. With enormous opportunity to deliver value to customers in various market segments and a quantifiable social impact, Powerhouse emerged as an excellent company for the Social Venture Fund to support.”

Powerhouse Dynamics’ SiteSage platform is a resource and asset management system for small commercial facilities that helps business owners manage energy consumption and improve business operations. Powerhouse’s primary value is helping its customers reduce their energy use, which also provides a strong, quantifiable social impact in terms of reduced carbon emissions and air pollution. Systems have been installed at restaurant and retail chains and other commercial accounts, including a full roll-out across all corporate-owned Arby’s and numerous pilot projects and smaller rollouts.

“Throughout this process, the Ross students have demonstrated a keen understanding of our business, coupled with a broader sense of the market dynamics that create opportunity for Powerhouse’s solutions,” said Martin Flusberg, CEO, Powerhouse Dynamics. “We look forward to partnering with the Social Venture Fund team and anticipate future opportunities to engage their consulting and research expertise on various growth strategy-related projects.”

To date, the Social Venture Fund is the only university impact investing fund with active investments. Along with the Wolverine Venture Fund and Zell Commercialization Fund, the Social Venture Fund completes the Ross trifecta of student-led venture funds managed by the Zell Lurie Institute. Together, these funds immerse 90 graduate students, from multiple disciplines, in experiencing all aspects of venture capital investing.