Vision

• Every student in our country will have access to rigorous, engaging, and supportive learning experiences that will allow them to access economic and social prosperity.

Mission

• A-Street invests in tools and services that drive coherent, differentially effective, and equitable solutions to transform the future of PK-12 learning.

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Theory of Change

The Problem A-Street Seeks to Solve
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America’s PK-12 education system is failing to provide our nation’s students with the resources and skills necessary to succeed in life. Today, hardly a quarter of American 8th graders are proficient in math. Less than a third are proficient in reading.¹ These data are even more dire among low-income and historically marginalized students, and while exacerbated by the pandemic reflect trendlines that predate COVID. The trends underscore the simple reality that our PK-12 education system is not working, especially for those students and communities most in need. Compounding this problem, the teacher workforce is in distress. Interest in the profession among high school seniors and college freshmen has fallen 50% since the 1990s and has reached its lowest level in the last 50 years. The percentage of teachers who feel the stress of their job can be sustained has dropped from 81% to 42% in the last 15 years.²

The root causes of these problems are multiple and complicated. One significant influence in our PK-12 education system is capital – both philanthropic and for-profit investment – that is the fuel to pilot solutions and deliver products and services to schools and educators. Sometimes, these products and services are high quality - rigorous in their design, have demonstrated impact, help teachers be more effective, and scale to serve millions of students well. In other cases, solutions are not a good use of precious instructional time, are helpful in isolation but not designed to work in concert with other solutions or might work for some kids but are not designed for the diversity of learners or school settings in the market. Particularly as technology fuels a massive proliferation of new tools, the myriad of solutions that teachers, students, and administrators must manage is greater than ever, even as outcomes are poor and declining.

Many of these solutions are funded by for-profit capital seeking a return on investment. This in and of itself is not a bad thing. But for reasons endemic to how traditional private investment functions, investors are often reluctant to make deep, long-term, patient investments in PK-12 products and services. As a result, funding has tended to flow in large measure to legacy solutions that are incoherent or to tech-forward point solutions which address either a single pain point or favor parts of school budgets that are easier to access and do not address longer-term, systemic change. This has resulted in a marketplace of goods sold to schools that are lower-quality, less coherent, and predominately inequitable – doing little to improve educational outcomes and likely contributing to stagnant (or worse) student performance trends. While money has been made, deeply troubling, inequitable outcomes persist, and the power of market forces has neither been maximized for educational outcomes nor long-term superior financial returns.

Philanthropic capital plays a critical and positive role in this marketplace. Philanthropy often takes a longer-term, risk-tolerant, and outcomes-based view, and thus plays an essential role across research, advocacy, and R&D. However, these efforts are often constrained by the need for the scale and velocity of the capital markets. With an aligned and complementary source of growth capital, philanthropy-backed solutions – with strong evidence and well-designed for systems change – can achieve next level reach and outcomes.

A-Street believes these capital dynamics have undermined PK-12 progress, while also failing to realize the potential to compound economic value in excellent companies that deliver real and long-term value to schools and society.

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Opportunity

A-Street will demonstrate a new model for PK-12 investing that blends the profitability and scale motives of for-profit capital with the outcomes orientation of philanthropic capital. We aspire to disrupt existing capital market dynamics and prove the power of long-term, patient, and risk-tolerant investing for generating market-rate returns and demonstrable education improvement. We believe that great education entrepreneurs and businesses have the potential to create solutions that can have a lasting, positive influence on teaching and learning. We believe that to realize the potential of these models requires a differentiated investor, purpose-built as a sophisticated, scale capital source which integrates PK-12 knowledge, resources, and networks to uniquely support companies in creating the most valuable and effective offerings. If we succeed, we will have created excellent financial returns and educational outcomes, and we will have influenced co-investors and other capital allocators to do the same.‍‍

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Areas of Focus

In each of our investments we focus on the core elements of successful teaching and learning: content, teachers, and students.

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1. Content: “High-Quality Instructional Materials”
   • Expand the reach and breadth of the highest quality core curriculum.
   • Provide useful assessments and data to personalize instruction and improve student performance.
2. Teachers: “Teaching Effectiveness and Sustainability”
   • Address the significant, perpetual shortage of teachers.
   • Improve teaching quality.
   • Make the teaching role more manageable and rewarding.
3. Students: “Student Well-Being and Motivation”
   • Ensure every child is ready and able to learn.
   • Prepare students to transition successfully from school to post-secondary opportunity and career pathway.

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As we invest against this mandate, we will maintain a multi-stage orientation even as we continue to prioritize the critical need for growth equity in the PK-12 market. We will focus our time and capital backing companies and situations where A-Street has a “right to win,” such as:

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• We have deep/differentiated knowledge, expertise, and clarity on how a market is evolving and how we can accelerate this evolution.
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• Traditional PE/VCs shy away due to shorter-term incentives.
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• Management teams and co-investors are focused on longer time horizons.
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• A-Street can be a unique and trusted partner, empowered to create value and drive impact alongside management teams and other investors.
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• Our involvement catalyzes others to invest where/how they would not otherwise.
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Finally, while A-Street will remain focused on PK-12, we will occasionally (< 10% of our committed capital) make investments outside of our core areas of focus, or with atypical risk or business profiles, if we believe they will serve to advance our mission.

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A-Street’s Theory of Change in Summary

If we seek solutions that are coherent, effective and equitable; identify and invest in high-potential companies; support those companies with guidance, connections and expertise; and influence other capital providers to be aligned with our approach …
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Then our portfolio will improve learning outcomes while achieving excellent financial results – demonstrating it is possible to do both well at scale without compromise …

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Which will lead to more educators and students using coherent, effective and equitable solutions, and more investment capital flowing towards these higher-quality solutions …

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Ultimately, this will prove that aligned, sophisticated capital can be deployed at scale to contribute to reshaping the future of PK-12 learning.
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If A-Street succeeds over the next decade, we hope the following will be true:

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1. Coherence* will be a driving market force. Clear demonstration of coherence at scale is our goal. Over the course of our investments and with support from A-Street, companies in our portfolio will move from scaling insurgents with a right to win to meaningful market forces influencing the entire curriculum market in ways that would not have been possible with traditional investment capital. The manner and structure of our investments will have enabled companies to create the best product features and design to enable a full demonstration of the power of coherence, in addition to accelerating the reach of these products. As our portfolio prospers, coherence will serve as a powerful competitive pressure, compelling other core players and the market as a whole to quickly and permanently prioritize coherence and quality.
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2. Investment approaches will be better aligned for teaching and learning outcomes, not just short-term gain. While it would be naïve to expect A-Street to move an entire private capital market of this magnitude to invest to maximize coherence, successful investments that demonstrate a “playbook” will serve as a critical catalyst. If successful, we believe other capital allocators will begin to focus on coherent, high-quality products and commit to sustained product innovation over longer periods. A-Street’s success will open investors’ eyes to the importance of collaboration with true education expertise that deeply understands quality and will provide a blueprint for peer allocators to follow.
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3. Philanthropy and market rate investment will have a model for how to collaborate effectively. A-Street will always be complementary to philanthropic work and advocacy efforts. We rely on appropriate collaboration with philanthropy to better understand what quality looks like, to help fund and test early ideas and models, to develop leadership and talent that understand quality, and to act as a respected market shaping capability where appropriate. A-Street’s success will accelerate the impact of aligned philanthropic work and prove a model for how philanthropies of all sizes can work with aligned private capital to achieve their mission and program goals together.
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4. Innovative ideas will have been tested and scaled in ways not possible with current capital sources. A-Street’s investment approach, aspiration for scale, and understanding of risk will allow unique “experiments” that are not possible in the market today. We will bring the best of private capital (scale, ability to attract and retain talent, sophisticated business building/value creation toolkit) to bear on ideas and models that have not yet been tested by private capital. Not all our experiments will succeed, but we will be taking big bets and helping those bets grow and evolve in ways not possible in our absence.

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* What do we mean by coherence? A-Street seeks solutions that respect and strengthen the relationship between the teacher, student, and content. Coherent tools build on the presence of high-quality core curriculum and leverage technology as an enabler of, not replacement for, excellent teaching. These tools use data to provide insight into a student’s mastery of knowledge and skill, and to guide how educators spend instructional time. These tools are thoughtfully designed, rigorous, and connected holistically such that they create a coherent user experience for the teacher and the student – one journey that builds from minute to minute, day to day, and unit to unit.

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¹ See NAEP data reported by the National Center for Education Statistics here. See related reporting by The 74 here.
² See research report by Matthew Kraft and Melissa Lyon (The Rise and Fall of the Teaching Profession) here.

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