DAVID SCHONTHAL

areas of expertise:
New venture creation, business model design

• A leader in the Business Design practice at IDEO, an award-winning innovation consultancy, where he has helped develop initiatives such as the Startup-in-Residence program and other initiatives around venture design and corporate entrepreneurship.

Contrary to what today’s headlines might suggest, becoming an entrepreneur doesn’t always mean launching a startup. In fact, one of the oldest and most well-trodden paths to entrepreneurship is through acquisition, whether by way of a search fund, independent sponsor, family business or entrepreneur-in-residence program.

To increase students’ exposure to the full spectrum of these opportunities, the Kellogg School has developed a new course and an accelerator program focused on entrepreneurship through acquisition.

Launched this past winter, the course Entrepreneurship Through Acquisition (KIEI 905-5) is designed to give students an over-view of the different ways they can engage in this space. It outlines the steps involved in acquiring a company, including searching for opportunities, raising capital and structuring deals. And, crucial to the success of an acquisition, it focuses on the cross-disciplinary aspects of growing a company.

“Entrepreneurship through acquisition is a very multidisciplinary experience,” explains instructor Alex Schneider ’99, adjunct lecturer of Innovation & Entrepreneurship and co-founder of the private equity firm Clover Capital Partners. “It draws on lessons learned from finance, marketing, business law, real estate development, negotiations and, most importantly, management and organizations. This is one of the reasons why Kellogg is really well-suited to be very successful in developing this pathway.”

As a complement to the course, Kellogg is developing an “Acquisitions & Ownership” track through the Zell Fellows Program. The track is designed for students seeking an in-depth, accelerated and tailored education in entrepreneurship through acquisition.

ALEX SCHNEIDER

areas of expertise:
Acquisition and ownership, small business investing

• Co-founder of Clover Capital Partners, a private equity firm with offices in Evanston and Los Angeles that specializes in acquiring and investing in small businesses.
• Currently sits on the board of four small food businesses including Main Street Gourmet, Jo’s Candies, Phillips Syrup and Wilde Brands.

As opposed to students in the program’s venture track, these students “have an entrepreneurial itch but … their primary area of interest is growth and scale,” explains David Schonthal ’09, clinical assistant professor of Innovation & Entrepreneurship and director of the Zell Fellows Program. “I’d categorize them as ‘scalers’ as opposed to ‘starters.’”

The program will be introduced to prospective students in the spring of their first year through an information session. Students interested in this pathway will be encouraged to obtain a summer internship working for a search fund, small private equity firm or family office engaged in acquisition sourcing and/or company operations. The program involves both a variety of immersive group experiences, such as company visits, guest speakers and simulations as well as resources to further individual pursuits such as developing a private placement memorandum for a search fund or developing an acquisition business plan for a family enterprise. Like students in the venture track, the fellows will receive mentorship and coaching; in addition, they’ll have access to resources to fund travel and administrative expenses.

Seven students are currently enrolled in the new track’s pilot; however, Schonthal anticipates enrolling up to 10 students in the track when it officially launches in the fall.

For Kellogg, these are the first steps in building out unique offerings in this space, and for good reason. “The entrepreneurship through acquisition outcome is such a phenomenal opportunity — not just for students, but for the investor community,” says Schneider. “It’s a way to use strategic capital and the passion, hard work and discipline of an entrepreneur to buy and grow great companies.”