St. Francis High School in Mountain View, a northern California Catholic institution founded by the Brothers of Holy Cross, has netted a windfall worth millions of dollars from an investment in Snap, the parent company of popular social media app Snapchat. The school’s St. Francis Growth Fund invested $15,000 in the new company in 2012, buying over 2 million shares, and sold two-thirds of those shares in March at the $17 IPO price, netting about $24 million.
In a statement to the school community, St. Francis President Simon Chiu noted, “These are exciting and humbling times for Saint Francis High School.”
While the school was still considering the “full impact” the new funds will have, he added that “the return on this investment will allow us to accelerate the goals of our strategic plan, which emphasizes our commitment to make Catholic education more affordable and accessible to our community, recruit and retain outstanding faculty and staff, and develop innovative programs and facilities.”
Tradition of Holy Cross
St. Francis High School was established by the Brothers of Holy Cross at the invitation of the Archdiocese of San Francisco in 1954; it is now within the Diocese of San Jose. Four brothers taught 45 young men as classes began in the fall of 1955. In 1957, the Sisters of Holy Cross established Holy Cross High School, a complimentary school for young women located less than a mile away. The two schools merged in 1972, with the first co-ed class graduating four years later.
Today, St. Francis High School serves 1,700 students taught by 110 faculty members. Annual tuition is $17,980,with the school’s endowment fund offering $3 million in tuition assistance to students in need in the current school year. Most of its graduates go on to college.
As part of its Catholic identity, the school offers a campus ministry program “in the tradition of Holy Cross,” which includes prayer and the sacraments, retreats and a community service requirement. Academics offered, according to Maggi Knochenhauer, the school’s director of academics, include a four-year honors and Advanced Placement program in English, social studies, mathematics, science, foreign language and computer programming.
Chiu reported that the Snap investment came about through the advice of Barry Eggers, a founding partner at the venture capital firm Lightspeed Venture Partners, and a parent of two St. Francis students who have since graduated. Eggers noted that his children were “enthralled” by Snapchat, which allows users to tell stories about their lives in photographs which disappear in 10 seconds, as opposed to photos kept as mementos of special occasions.
In a Lightspeed website post, Eggers recalled the conversation he first had with his daughter about sending photographs through Snapchat: “[She said,] ‘It’s like funny and goofy stuff between friends. It’s one of the most popular apps at school, along with Angry Birds and Instagram.’ I had heard of Angry Birds and Instagram ... but not Snapchat. ‘How often do you use it?’ I asked. ‘I used to send five or six a day. Now I get 30 a day!’”
Eggers’ firm investigated the new app — which included interviewing the founder who was operating the business out of a Stanford University dorm room at the time — and decided to invest in the new company.
Chiu recalled, “In a stroke of remarkable generosity, [Eggers] decided to invite Saint Francis to join him.”
St. Francis Growth Fund
The St. Francis Growth Fund was established in 1990 as a way to generate revenue for the school outside of tuition increases. St. Francis’ director of development (and later president), Kevin Makley, established the fund with the aid of two venture capitalists who were supporters of the school, leveraging the school’s location in the tech company-rich environment of the Silicon Valley to raise additional funds for the school. Before the Snap investment, the most lucrative investment made by the Fund occurred in 1996, when a $25,000 investment in a company named Advanced Fiber generated a $2.1 million return. All money raised within the fund is separate from the school’s primary endowment, so that returns are not used for annual operating expenses.
Eggers, chairman of the board of the St. Francis Growth Fund, pitched the Snap investment opportunity to the board. Snap received its first investment of $500,000, with $485,000 coming from Lightspeed and the remaining $15,000 from St. Francis. The board expected a modest return, according to Makley, but nothing like the millions it earned.
The funds raised will not completely fund the school’s Leading with Hope and Zeal strategic plan, Chiu said, “but it will help lay the necessary foundation and give us a remarkable head start.”
Jim Graves writes from California.