Ohio State recently invested tens of millions of dollars into a venture capital firm, despite concern by university officials.

OSU invested roughly $50 million into Drive Capital, which was launched by Mark Kvamme earlier this year.

Drive Capital was co-founded by Kvamme and Chris Olsen. Both were previously partners at Sequoia Capital, a venture capital firm based in California that has backed companies such as Apple, Instagram and Google. Olsen is also a native of Cincinnati.

Venture capital firms invest money into early-stage startup companies. These type of investments are typically seen as high-risk, high-reward.

A March memo prepared by university officials and released to The Lantern Friday evening revealed concerns raised by officials about the investment.

Emails and other memos, in addition to several documents, fulfilled a public records request filed by The Lantern Oct. 24. Multiple segments of the provided public records were redacted including key partnership terms, fees and target fund size.

Redacting was done in concordance with Ohio law including employee personal email addresses and trade secret information, OSU spokesman Gary Lewis said in an email.

“While Drive Capital may offer a persuasive story of applying Silicon Valley methods of investing to Midwest companies, it is still very much unproven at this stage,” the memo said. “It does not meet our traditional underwriting standards.”

Several university officials expressed concern at the size of the commitment.

“Is there an opportunity to revisit Drive Capital and the size of the commitment…or is that a done deal?” Jonathan Hook, OSU chief investment officer, said in an email to Geoffrey Chatas, OSU chief financial officer, June 6.

Similarly, Joseph Alutto said in a June 13 email to Chatas, “The only issue I see is the initial size of the investment. What is the justification for a $50 million investment rather than one in the $20-30 million range that you described as more typical?” At the time of the email, Alutto held the position of executive vice president and provost of OSU. Alutto stepped into the role of interim president following then-President E. Gordon Gee’s retirement July 1.

Emails also show concern around “a lack of consensus on the source of funds for the investment.”

OSU pledged to invest in Drive Capital in July. However, Drive Capital began lobbying for investment from OSU as early as October 2012, following Kvamme’s resignation from JobsOhio, a private development agency that has been a key initiative of Gov. John Kasich.

“Ohio State would be an ideal limited partner for us, and we would love to work with you guys to achieve this vision in the coming years and decades,” Drive Capital co-founder Chris Olsen said to Hook, OSU in an email dated Oct. 26, 2012.

Gee, who is a board member of JobsOhio, knew Kvamme before working with him on the investment.

Kvamme sent an email addressed to “Gordon” May 15 thanking him for dinner. The address of the email was redacted in the provided records. The email also thanked “Gordon” for agreeing to work with Chatas and reach out to other universities.

Later an email sent to Chatas, signed “G,” said, “I spoke with Joe Alutto today and told him we had to honor the Kvamme agreement.” The address of the email was redacted in the provided records.

OSU’s investment in Drive Capital came shortly after Gee announced June 4 he was retiring from his role as university president.

Gee’s announcement came days after controversial remarks he made at a Dec. 5 OSU Athletic Conference meeting came under public scrutiny. Comments, which he later called “inappropriate,” about Notre Dame and the Southeastern Conference in particular brought national attention.

The investment also followed a provision approved by OSU’s Board of Trustees at an Aug. 30 meeting that brought together OSU’s two investment portfolios: a long-term investment pool and the university’s operating funds.

The provision also allows the president, provost and senior vice president for Business and Finance in consultation with the Chair of the Finance Committee and the Board of Trustees to invest up to $100 million in funds at their discretion, “but in the best interests of the university,” according to minutes from the meeting.