Penn State Students Closed Their First Real VC Deal: X-Hab 3D

Twenty Penn State undergraduates just picked their fund's first investment: X-Hab 3D, selected as the debut deal of the philanthropically funded Propel Penn State Seed Fund. The students weren't running a simulation. They spent ten weeks doing live due diligence on real companies competing for seed capital, with checks of $50,000 to $150,000 on the line.

The Penn State Smeal College of Business has now completed the inaugural cohort of its Venture Capital Investment Practicum (VCIP), launched in fall 2025. It's the university's first undergraduate program centered on venture capital investment training, developed and offered by the Farrell Center for Entrepreneurship and Innovation. The program and fund back Smeal's "Top 5 in 5" strategic plan, which aims to expand career-oriented experiential learning for undergraduates.

What does this change for aspiring VCs?

In short: they can now learn the trade by doing it, not just studying it. The VCIP gives students an end-to-end view of the venture capital investment cycle. Over ten weekly sessions, the cohort covered early-stage investment frameworks, market and competitive analysis, financial modeling, founder and team evaluation, legal and intellectual property considerations, and how to build and communicate investment recommendations.

"The VCIP was created to put students in the driver's seat of the venture investment process," said Michael Zaydon, administrator of the Propel Penn State Seed Fund and the practicum's instructor. "Students take on the role of diligence analysts as they work toward making real investment recommendations for the Propel Penn State Seed Fund."

The structure mirrored a working VC firm. Each session combined foundational instruction with alumni guest speakers and hands-on application during a live diligence process, with student teams evaluating companies seeking seed-stage funding.

A competitive, multidisciplinary cohort

The inaugural class was selected from 60 applicants, a one-in-three acceptance rate. The 20 students came from across Smeal and Penn State: finance, accounting, economics, supply chain, corporate innovation and entrepreneurship, political science and general science. Class years ranged from sophomore to senior. That mix, the college says, created interdisciplinary problem-solving that reflects how professional investing teams actually look.

Real companies, real diligence

The pipeline was genuine. Forty companies applied for consideration from the seed fund. Eight were invited to pitch virtually to the student cohort, and the students selected four for full diligence.

The diligence teams' work read like a junior analyst's job description:

• Market sizing and competitive mapping
• Stakeholder and customer interviews
• Financial and revenue modeling
• Product, technology and IP assessment
• Analysis of founder backgrounds and team capabilities
• Identification of key risks and mitigating factors
• Development of complete investment memos

Students met directly with founders and consulted Penn State alumni and subject-matter experts. They also pulled in the broader university ecosystem, collaborating with administrators, faculty and students at the Eberly College of Science, Penn State College of Medicine and Penn State Dickinson Law. Students were encouraged to use AI tools responsibly throughout the process.

"Getting to interact with CEOs and other executives in a professional environment and learning about [their companies] made the experience very special for me," said Henry Ingram, a senior general science major in the BS/MBA program. "Knowing that our investment could have an impact on helping this company grow while also knowing I needed to be objective about how their solution solved the problem shaped the way I looked at every piece of information."

In the final week, each team presented its findings, investment thesis and final recommendation to the fund's investment committee. Gary Amos, a 1986 Penn State graduate and member of the Propel Business Advisory Network at Smeal, sat through the presentations.

"I was struck by the students' discipline in how they approached diligence and investment decision-making," Amos said. "They demonstrated thoughtful analysis, intellectual curiosity and a maturity well beyond the classroom."

The cohort collectively identified X-Hab 3D as the fund's first investment. All recommendations pass through multiple levels of internal review before any transaction is executed, and any returns from portfolio companies get recycled back into the program to sustain future investing and education.

The career payoff

Students reported gains in financial analysis, structured decision-making and communication. Several said the practicum became a differentiator in recruiting.

"The VCIP gave me clarity on my career path because it exposed me to how finance really works beyond the classroom," said Madeline Crea, a rising senior finance major and international business minor heading to a treasury management internship at PNC Bank this summer. "Hearing direct feedback, working through real problems and seeing how investors think made me more confident in pursuing a career in finance and showed me what skills I actually need to succeed."

Delaney Cope, a rising senior who will be a transaction advisory consulting intern at RSM in Philadelphia this summer, credited the program with helping her land the role. "Being able to speak about working directly with startup founders and Smeal mentors during interviews helped me clearly demonstrate both technical and communication skills, which I believe played a key role in securing my internship this summer," she said.

Alumni muscle behind the model

Alumni from the Propel Business Advisory Network served as guest speakers, team mentors, subject-matter experts and honorary investment committee members. The first cohort's supporters included Gary Amos, David Blackledge, Shawn Clark, Anik Choudhury, Mike Dallas, Taylor Distler, Patrick Flanagan, Jonathan George, Bharath Gollapalli, Jeanette Miller, Cara Pinto, Paul Porrini, Madison Steinmann, Sydney Wasikowski and Ian Westerman.

"Our alumni donors and volunteers elevate the entire VCIP experience by connecting it directly to the real world," Zaydon said. "Alumni support for and engagement with the Propel Penn State Seed Fund and VCIP is an investment in student success and Smeal's future."

Julia Scala, a senior economics major joining Equitable in New York City as a wealth management financial advisor after graduation, said the advisory network's feedback made the industry feel accessible and showed "how willing Penn State alumni are to help students grow."

The fund itself is evergreen and powered by philanthropic contributions from alumni, supporters and corporate partners, which finance both the seed capital and the programming. "The Propel Penn State Seed Fund relies on philanthropic support," Zaydon said. "We continue to welcome Penn State alumni and friends to join our growing list of supporters helping us scale and sustain this hallmark experiential learning program."

The VCIP will run at least annually, with the fund targeting one to three investments per cohort cycle at $50K to $150K per check — meaning every future cohort gets a live pipeline and real capital decisions of its own.