From The Plain Dealer
Ohio State University has invested tens of millions of dollars in a new, untested fund co-founded by a venture capitalist who enjoys close relationships with recently retired university president E. Gordon Gee and Gov. John Kasich.
The deal was done behind closed doors, right around the time trustees changed OSU policy to allow top administrators more leeway over how to invest operating funds.
OSU’s commitment to Drive Capital, launched this year by Silicon Valley veterans Mark Kvamme and Chris Olsen, is worth about $50 million, sources familiar with the arrangement told Northeast Ohio Media Group. It is unknown who recommended the investment or whether the university sought competing proposals. OSU officials have not provided details or documents that the news organization first requested three weeks ago.
Kvamme, in an email, acknowledged that an agreement exists between Drive Capital and OSU — one that requires university officials to notify him and Olsen whenever their fund is subject to a records request. But Kvamme and Olsen declined to discuss their business dealings on the record, citing Securities and Exchange Commission rules.
“We believe in the opportunity in Ohio and the Midwest to create world-changing technology companies,” Kvamme, a native of California, wrote in the email. “It is important that people here understand our goals and objectives for the region.”
It is unknown whether OSU trustees reviewed or signed off on the deal. One member of the Finance Committee, which has oversight of the university’s investments, claimed not to know of the deal. Other trustees did not respond to requests for comment.