In late 2011, the Social Venture Fund (SVF) at the University of Michigan’s Ross School of Business issued a call for social enterprise business plans. It received one from LearnZillion, Inc., a company with an experienced management team focused on improving kindergarten through twelfth grade (K-12) education using innovative online lessons. However, LearnZillion’s emphasis on strong content development alone did not prove that its lessons would afford it a competitive edge and improve education outcomes.
LearnZillion was looking to raise $1 million to fund key hires and continue robust content development. After a preliminary majority approval by its members, SVF decided to conduct a full due diligence to further understand LearnZillion’s model and estimate the financial and social returns of the potential investment. The key task assigned to the SVF team was to make a case for or against an investment in LearnZillion and present it to the SVF members and board. The team would consider LearnZillion’s business model within the industry, opportunities for impact, risks, financial projections, and potential exit strategies.