K-12 ed market exploding, says Edweek

The flow of venture capital into the K-12 education market has exploded over the past year, reaching its highest transaction values in a decade in 2011, industry observers say. This according to Katie Ash, writing in the Jan. 31st online edition of EdWeek.

"[The common core] is breaking down some of those state-level barriers that made it challenging for folks [to achieve scale]," said Adam J. Newman, a founding and managing partner of Education Growth Advisors, an education business advisory firm in Stamford, Conn. Newman. (His firm's other founding and managing partner, Christopher L. Curran, is a trustee of Editorial Projects in Education, the nonprofit publisher of Education Week.)

Ash's piece offers little in the way of critical analysis of venture capital's surge into public ed. She relies mainly on the usual members of the edu-corporate complex as sources for this piece, including, former Gates ed chief Tom VanderArk who is now a managing partner of Learn-Capital; Kim Smith, the co-founder (with Andrew Rotherham) and chief executive officer of Bellwether Education Partners as well as  the NewSchools Venture Fund; and Robert Lytle, a head of the Boston-based Parthenon Group's Education Center of Excellence, which focuses on for-profit global markets. 

According to Ash, the hottest area for venture capitalists probling the public ed sector is "impact investing." That's where capital doesn't just buy a profitable return on investment, but also reshapes the structure and culture of public education to make it more receptive to their goals. 

"There's a small, emerging niche of 'impact' investors," says Smith, "who typically made their money in the corporate sector and now want to reinvest in a good company that will provide profitable returns, but will also have a positive social impact."

Not surprisingly, this Edweek piece is underwritten by the the biggest "impact investor" of them all, the Gates Foundation. 

Did they really give VanderArk his own chain of charter schools?

Tom VanderArk, was the Gates Foundation’s former executive director of education and a national proponent of online learning. His for-profit company was granted charters in 2010 to open a high school in Bedford-Stuyvesant, Brooklyn, and two others in Newark. The New York school, Brooklyn City Prep, also got space in a public school building — a precious and controversial commodity — hired a principal, and welcomed applications from 150 eighth graders this spring.

But after spending more than $1.5 million of investors’ money on consultants and lawyers, Mr. Vander Ark, 52, has walked away from the project, and the schools will not open as planned this fall, leaving others involved stunned and frustrated.  -- N.Y. Times