Edison Project Announces $30 Million in Investments
The Edison Project last week announced $30 million in new investments that will guarantee it can open the first phase of its for-profit plan to run public schools.
The financing package will provide money for the project to operate its three previously announced public school projects for 1995-96--one elementary school each in Mount Clemens, Mich., and Wichita, Kan., and a charter school in Boston in partnership with a local foundation.
The $30 million will also pay for continued development of the Edison Project curriculum and a second year of operations involving as many as 10 schools.
Christopher Whittle, the media entrepreneur who founded the closely watched Edison reform venture, is leading a group of investors putting up $15 million. The Sprout Group, a venture-capital concern affiliated with Donaldson, Lufkin, & Jenrette Securities Corporation, is putting up $12 million, but will have an equal number of seats on the board of directors with Mr. Whittle's group.
Benno C. Schmidt Jr., the president and chief executive officer of the Edison Project, is leading a third investment group that is putting up $3 million.
'Money To Launch'
Mr. Whittle is giving up his title as the chairman of the project. Under the new arrangement, there will be no chairman, but those duties will be shared by Mr. Whittle and the Sprout Group.
"Anytime you go out and raise money like this, it comes with terms attached," Mr. Whittle said in an interview late last week.
He said the company will have to seek new investments to continue growing beyond the 1996-97 school year. But the $30 million "gives us the money to launch, and we're pretty excited," he said.
Janet Hickey, a general partner with the New York City-based Sprout Group, said her firm was impressed with the Edison Project's model for a restructured public school focused on high academic standards, use of technology, and parental involvement.
"We think they have an excellent product," she said. "The Edison curriculum is basically an educational best-practices curriculum."
The Sprout Group has investment experience with for-profit health-care providers, and the company sees a parallel with the nascent movement toward the private management of education.
"What's happened over the last 30 years is that for-profit entities have been very important to the development of health care without taking it over," Ms. Hickey said. "We think there may be an analogous situation in education."