I encourage my UC Santa Barbara students to practice entrepreneurship in college, before formally starting a company. Juniors Yash Thukral and Nathan Yee (UC San Diego) and Sam Yaffa (Cal State University, Northridge) have taken this advice to its logical end and did not wait to graduate before beginning their entrepreneurial journeys in earnest.
Despite having one more year of school ahead of them, these students created a student-led investment vehicle, Triton Fund, raising $25 million, primarily from local San Diego investors and alumni of their respective universities.
John Greathouse: Hey guys. Thanks for taking the time for a cyber chat. I’m impressed with what you’ve pulled off. As someone who has raised about $100 million, over several venture funds, I have a first-hand appreciation of your success. Venture funds are like startups, it’s really hard to raise money, especially when you don’t yet have a track record.
There are a ton of micro-funds in the market right now. How is Triton differentiated and to what do you attribute your fundraising success?
Nathan Yee: Thanks John. You’re right, raising money is never easy.
Our investors were intrigued by our ability to bridge the gap between alumni and current students to allow a pathway to high finance where students get hands on learning experience unparalleled to a classroom environment.
We officially launched as a fund in April 2018 and now have 15 students working at the fund, with over 40 academic mentors, and a life science Advisory Board. All of our mentors and advisors are alumni, professors, or have some connection to the Universities.
Yash: No. The fund is a separate entity. But, we try to connect ourselves to the schools in as many beneficial ways as possible. For example, because of our relationships, the students at Triton Funds are able to get academic credit from UC San Diego and the schools send us their best students.
Greathouse: Most college juniors are focused on getting a good summer internship, not starting a legit investment vehicle. What’s the fund’s backstory?
Yash Thukral: Triton kind of just happened. It started off as some crazy dorm room idea in the summer of 2017. We all talked about different ideas every day but this one we just couldn’t get off our minds. Sam and I are childhood friends, we grew up together in LA, and Nathan and I met our first year at UC San Diego where we joined pretty much every business organization on-campus.
I came from interning at small-middle market investment banks, Sam was interning at UBS where he learned the wealth management side of finance, and Nathan was working for an early stage startup. We all clicked because we were always hungry for more and willing to take risks. We had the will to do and learn more, but our responsibilities were restricted by our age. Also, we all are passionate about finance, however, our schools were not “targets” for bulge bracket VC, IB, and PE firms, so we decided to make our own path.
We came up with a radical idea: what if we start our own fund, a student run fund, where we can get hands-on experience investing real money in real companies? We took this idea to alumni and they loved it. They said, ‘Put it together, paper trade the fund and create a brand, something that makes sense for students to learn from, and if you do well, we’ll back you.’ We spent our summer and fall (of 2017) building the foundation and that’s what brought us here today.
Greathouse: I love that concept. One of my goals is to establish a similar class in which students can vet and perform diligence on real venture investment opportunities.
I’m familiar with a few student oriented funds, such as the University Growth Fund. How is Triton different from other folks who are leveraging students at investment funds?
Sam Yaffa: The typical “student-fund” focuses on investments in blue chip companies and is overseen and directed by a school or individual who makes the final decisions; we know this because we all have experience in our own university’s student funds.
Yash, Nathan, and I raised our own $25 million in capital so we can structure this fund the way we want to and make the decisions ourselves. Here, the students run the show from finding the companies, to proposing the investment to the company, and maintaining a relationship with the respective company’s management team. The reason why our investors have granted us so much power is due to our self-proclaimed “#millennialtouch” and proprietary investment strategy. They value the idea that us, as millennials, have a better perspective of what is the next big thing and we can allocate our portfolio accordingly.
Additionally, we are trying to change the way the public perceives Wall Street and create a whole new definition of Venture Capital. Our generation currently has a negative connotation of Wall Street as we all experienced the tough times of the 2008 recession caused by financial firms. We give investments and finance a young and new look, seeking to provide value to our community and the companies we invest in.
Greathouse: To be clear, “venture capital” has a traditional definition that involves relatively risky investments in private, mostly early-stage companies. How does your “new definition” of venture capital differ from the past?
Yaffa: Great question. We have found that there are venture type investments available in the public markets because public companies are often early-stage or seek capital to grow their new ideas. What we like about investments in public companies is that financial statements are audited and all information is transparent, thus we have all the facts and data necessary to make an informed investment decision.
Greathouse: I realize it’s very early days, but have you been able to establish a corporate culture? If so, how would you characterize it?
Yee: Our office is like a party – you never really know what to expect. Every student focuses their time on whatever project they like, as long as it benefits the investors and fund as a whole. We actually added a crypto trader to our team at the start of this year and allocated a small portion of our portfolio strictly for cryptocurrencies just to see how it goes.
We encourage our students to share their ideas and we practice an open-door policy. No question or idea is a bad one, and as long as the student has a plan to execute the idea, we will provide the resources to accomplish it.
Coming to our office day in and day out is exciting. If you are interested in something like artificial intelligence let’s say, we will get an AI company on the phone so we can find a way to invest in the industry. We constantly preach to think, act, and respond. If you do these three easy steps in everything you do, no matter your age or experience, you can succeed.
Greathouse: What are your individual goals and future aspirations (or) direction of the fund? Is this something you intend to pursue after graduation?
Yash: Our individual goals vary. Sam and I plan on attending law school in the fall of 2019 and Nathan seeks to continue working on a startup of his own. However, we are all committed to Triton Funds and will continue working for the fund beyond our graduation in a year.
Sam: Our aspirations for the fund is to create a legacy and grow this beyond our imagination that started just one year ago in Yash’s dorm room. One aspiration that comes to mind is bridging the solidarity between UC and Cal-State universities. I come from Cal-State Northridge whereas Yash and Nathan come from UC San Diego. When we put our minds together, we made magic happen and that is something we did not expect.
UC students have strengths where Cal-States student do not and vice versa. If we continue linking UC and Cal-State students, the possibilities are endless of what can be started when putting our minds together. Another not too distant goal of the fund is to expand beyond UC San Diego and La Jolla. We think it would be a dream come true to someday have a Triton Funds office at every underrecognized business school across the country.
Greathouse: Those are great goals. Anything that increases the cohesiveness and cross pollination between California’s universities, is a plus for the students and the state. Keep up the good work.
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