Smith believes that the most successful teams combine someone who has experience within the system, someone who understands technology, and a sales expert. The environment of the group has to be team based, with each member having a voice in the company.
New Schools is non-profit fund with only a social return; any earnings are reinvested into the fund, says Smith. Ventures are chosen for their social impact.
Smith talks about how New Ventures aims to create systems that are K-12 to provide a coherent experience to children. Incubation is important. New Schools buys run down buildings and turns them into successful schools. They do everything from recruitment to management to building, she adds.
The charter school system allows the alignment of all the stakeholders: the board, the management, the teachers, and the kids, says Smith. They all are choosing to be part of this alternative system and therefore have a stake in its success.
Smith belives that parents sometimes do not know what is best for their children. GreatSchools.net aims to make parents more informed about their education choices.
School finance is inequitable between low- and high-income communities, says Smith. Is it better to try to fix the system or provide alternatives? New Schools funds projects for both options. Most reform efforts to date have focused on only small improvements inside the system. Though most people think of charter schools as competition, says Smith, New Schools describes them as 'co-opitition,' providing an alternative but also helping to encourage improvement in public schools.
Smith explains that fundraising is very hard in the non-profit sector. New Ventures typically co-invests in A rounds with other venture capital firms, typically newer groups that have an openness to thinking about new solutions and understand the power of entrepreneurs. Generally, deals are in multi-millions with clearly defined milestones over several years.
Scale is very difficult in the non-profit sector, says Smith. The franchise model is not successful because there is no authority or ability to take away value if a franchise is not performing.
Smith talks about how the VC model allows for larger investments over a longer period of time. Also, the investment tends to be in organizational infrastructure rather than a service. VCs are more focused on growth than bottom-line success, she says. An entrepreneur must be disciplined and willing to walk away from people who do not share the same values.
Smith explains that New Ventures measures success in four layers. The first layer of success is immediate outcomes for the kids served by current ventures. The second layer is the ventures' impact on the system. The third layer is the success of New Schools in assisting their ventures. The last layer is the change in the entire system to a performance-based model with greater hybrid thinking.
Smith believes that extracurricular activities are essential. Funds are being cut currently because, in trying to achieve funding equity, everyone's funding was reduced instead of simply increasing funding to those who needed it. Fixing this is a matter of political will, she adds.