Education has always held pride of place in Tom Davidson’s life and career. He ran for the Maine legislature from his college dorm, and went on to play a key role in enhancing broadband access to the state’s schools and libraries. Later in life, as a partner at Village Ventures, he funded early-stage technology companies in education before driving all the way down to Washington, D.C. to build a digital education startup. Five years on, EverFi is at the forefront of educational innovation, delivering life-enhancing and life-saving programs to over 14 million learners, many to sections of society that need it most.
Leveraging his passion for education and prior experience in venture capital, Davidson has raised over $60 million from a veritable who’s who of venture world – Amazon’s Jeff Bezos, Twitter’s Evan Williams and Google’s Eric Schmidt, and marquee venture firms such as New Enterprise Associates, Advance Publications, Rethink Education, and Allen and Company.
In an interview with citybizlist’s Edwin Warfield, Davidson outlined his vision for EverFi. “I want it to be a very large standalone awesome software company that has chosen 15 or so areas that it wants to attack that are important to the country and is doing that really, really well and profitably,” he said, calling his goal a really simple one.
Davidson also explained why he believes in a combination of for-profit goals and social enterprise, and why companies like EverFi are best positioned to expand education access to all, besides sharing leadership secrets that won him a 99% employee approval rating and a place among Glassdoor’s highest-ranked CEOs.
Q: The model has three foundations - 1/3rd on corporate sponsorships with schools, 1/3rd prevention programs for schools and 1/3rd to companies teach employees. Can you tell us about this?
A: The EverFi model, you can really break it down into three age categories. There is our K through 12 business, there is our college business, and there is our adult business. In K12, it came very much from the realization that these areas that we focus on are huge life skills areas that are missing from the school day. They are complicated, they are difficult for parents to talk about, they are difficult for teachers to find resources, and school districts have just made a decision and state legislatures alike made a decision not to prioritize it.
You think about student loan preparation, FAFSA preparation, financial literacy, alcohol responsibility, bullying prevention, online digital citizenship, character, you know, character programs. When school districts are so tight, so under the gun from a funding perspective, they are never going to allocate dollars to these things, but these are the types of programs that live and exist in communities that have the means to have them. Bottom line, if you are in a highly funded school district, you are going to have these things, if you are not, you are out of luck.
In our K12 business, we build these really sophisticated learning programs that teach kids what a mortgage is, how credit works, how you destroy your credit, how compounding interest is calculated, how you save, how you build wealth and then what we do is we go get foundations and companies and others to license that software for communities that they care about, and that has turned into a really, really effective way to fund things, but still have best-in-class software that is developed by the best thought leaders in the world but provided at no cost to schools, which is really important. It is an amazing group of people who have come together to fund that.
In our college business those are areas that have a dramatic effect on student success and whether students stay in school, whether they get off on the right foot. These are crippling issues like sexual assault, campus violence, campus sexual violence, alcohol responsibility, hazing, and so what we do is we build out these programs with the best thought leaders in the world in these areas based on research and efficacy. We then sell those programs to Harvard or UVA or Alabama or, you know, University of California system. They license that software and then provide an orientation basis to students when they arrive.
In our adult business finally is a new area for us. We really put businesses… the business of providing really critical education to their customers and to their employees. Again, that is a situation where the largest companies in the world license our software in order to communicate whether it is employee financial wellness, whether it is the best in class, you know, ethics and diversity training, they use that to provide that to all of their employees.
Q: The issues that you're tackling are: bankruptcy, mortgages, protecting students from rape... and then you have corporations wrap “their brand all over the classes.”
A: Some interesting facts about EverFi, we run without question the two largest courses in the world, which is AlcoholEdu and Haven, and CampusClarity, which are sexual assault prevention courses. Those courses will have multi-million users going through and actually getting certified at the end of the day through those programs. We have had about 15 million students get certified through our program, so it is an enormous network, which represents this year about 20,000 K through 12 schools, about 1400 colleges and universities, and about 3000 or so corporations that license the software. It is a very large network and it continues to grow every week.
Q: You have landed a marque group of investors in your Series A and B – New Enterprise Associates, Rethink Education, Allen & Company, Google's Eric Schmidt, Ev Williams from Twitter and Jeff Bezos. Can you tell us the history of your fund raising?
A: We started the company off and for three years basically, two and a half years, we just bootstrapped the company and I think that allowed us to really get something in the DNA here that has lasted all the way through. It has basically been profitable since the day we started the company with a few foot faults, you know, one year or so. We have operated the business as if it is the last capital we are going to have, but we also wanted. We strive at EverFi.
One of our key tenets is we want to be the absolute best and so we certainly wanted the best investors in the world. In 2010, we went out and got our first venture round, which was a $11 million round. I didn’t tell our investors this… I have only told them after a number of years how broke we were right before they invested but we were dead broke. We got $11 million from NEA and Allen & Company and Eric Schmidt at that time the CEO and Chairman of Google, and they were really the first big investors in the company. They led that $11 million round.
A couple of years later (we) raised a second round of about $10 million and that came from Jeff Bezos and Evan Williams, the founder of Twitter, and Eric Schmidt and some really wonderful other folks. Scott Plank from Under Armour and just an amazing group of people, and most recently had some really great folks with advanced publications, the Newhouse family and others.
What we have tried to do is do two things. We wanted the best people in the world in their various areas, so whether it was the best software investor in the world, which is without a doubt NEA, or folks from the sports world or folks from the technology world, we wanted… we really wanted to have the best in class players. The only downside to that is it is very, very hard to impress them and so there is not much you can do on any given day to impress these people. It keeps us certainly hungry and moving pretty fast to have them.
I tell people all the time, I say, listen, you know, you play for the Yankees now and there are certain expectation of when you show up for work here everyday that you are playing with very, very high expectations on your head, and I think we all take that really seriously and really work very hard to live up to those expectations.
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