THE EARNING CURVE: Student investors brings high-finance to UCSD
By COREY LEVITAN
May 23, 2018 | 12:00 AM
San Diego is the fourth-largest U.S. city for venture-capital investment (behind only New York, Los Angeles and San Francisco). Yet there are no educational opportunities that train San Diego’s college students for that career path in any hands-on way.
Triton Funds launched in April to address that shortage. Here, in a sun-deluged former retail store at 1262 Prospect St., nine college students identify investment opportunities and court investors for a fund currently worth $25 million. Most are undergraduates from UC San Diego, although one recently graduated and one attends Cal State University Northridge.
“On Fay Avenue and Wall Street, there are so many financial institutions, so many venture capital and private equity companies — Morgan Stanley, Merill Lynch...” said Yash Thukral, a 20-year-old UCSD double-major in applied math and management science. “How come none of them come to UC San Diego? We’re in their backyard. I’ve never seen them on campus, ever. So we’re here to bridge the gap between us and them.”
Thukral was interning at a middle-market investment bank when the idea hit. His childhood friends from L.A.’s Granada Hills community — 20-year-old Sam Yaffa (a paid intern at UBS at the time) and Nathan Yee, 21 (who was at a startup backup company) — were all in.
“We came back after the summer and we all were thinking, ‘I don’t want to go work at some internship and fetch coffee and do random Excel work and research that’s going to be outdated by the time we try using it,’” Thukral said. “Let’s get something hands-on. Let’s find some people to back us.’”
They got their investors first, whom they will only identify as “high net-worth individuals,” by combing their networks and hitting the phones. Then they set up the ground rules for identifying good investments. They prefer local companies, startups with UCSD alumni on board.
“There are a lot public life-science companies in our backyard right here,” Thukral pointed out. “Other leads come from investment banks.” (Among Triton’s first investments were $1 million each in a global smart city network called DigitalTown, and in a blockchain platform, called CityShares, designed to let people own "shares" in their cities' local economies.)
Currently, Triton Funds runs solely on donations received from the public companies it’s inked deals with. (The office space was donated by one of their mentors.) Other execs — all UCSD graduates — sit on the company’s mentor board and provide guidance instead of capital.
“We have a hat with all their names in there,” said Yaffa, the Cal State Northridge student. “We draw it out once a week and we put them up for a Skype interview and then they answer all the questions we have.”
Triton’s members earn academic internship credit from UCSD in lieu of salaries. Yaffa said the fund provides them experience they would otherwise have to wait 10 years into their careers to receive.
“We’re literally closing deals,” he said. “What I’ve learned here in one month is already more than I’ve learned in a total of two years doing different internships. The learning curve here is very steep.”
Before Triton, the closest thing to an ecosystem like this was the Student Foundation Investment Committee, which manages a UCSD-owned fund whose profits get converted into scholarships. (Both Thukral and another Triton volunteer, equity analyst David Rubalcava, are still on that committee.)
“Both are great learning experiences, but here, I’m talking to CEOs and I’m not even here a month,” Rubalcava said.
To distinguish itself as young, hip and in touch with tech, Triton markets itself with the slogan “millennial touch.” However, the first thing any millennial would notice about their company is that it consists entirely of males so far.
“We’re not disincluding anybody,” Yaffa clarified. “I think it’s important to state that we did grow too fast to focus on different sticking points. But we know that’s a sticking point and it’s something we’re addressing very early on.” (Thukral calls enlisting women the company’s “number-one goal,” although he acknowledges that the size of the team at UC San Diego is currently maxed out, so that goal will either have to wait until members graduate or give notice, or until chapters are established at other universities.)
So far, Triton said it’s earned $2.5 million in profits for its investors, which it invested back into the fund. But obviously, because it operates in the real world, there are real risks.
“This could end in three months from now,” Yaffa said, “or this could be a legacy.”
Going forward, Triton hopes to become a self-sufficient program where returns and donations contribute to an endowment that funds scholarships, and where all students in the program become mentors once they graduate.Looking ahead to their personal futures, Thukral and Yaffa both see law school in them — not necessarily to become attorneys but so they can close deals, and take companies public themselves, without having to rely on attorneys to make every move.
Meantime, Yaffa calls it “surreal” working with so much real money in the real world at such a young age, then rejoining colleagues on campus who are worried about some test or wondering which fraternity to join.