Stanford is really an investment fund that runs a school on the side for the tax break. This started in 1991, when Stanford spun off their endowment management as the Stanford Management Company.[1] SMC's headquarters was on Sand Hill Road, across from all the VCs. This ended up putting Stanford into venture capital in a big way.
This was new. Before that, universities tended to put their endowments into passive investments - real estate, stocks, and bonds. Investing in startups worked out very well for Stanford. Stanford had pre-IPO stock in Cisco, Yahoo, Google... They have money in various VC funds. Buying into YCombinator is consistent with that investing approach.
As SMC became more powerful, executives from SMC started moving into positions in the university itself. SMC moved its HQ onto the main campus. Not clear where this will end; we'll have to see who replaces Henessey as president.
This was new. Before that, universities tended to put their endowments into passive investments - real estate, stocks, and bonds. Investing in startups worked out very well for Stanford. Stanford had pre-IPO stock in Cisco, Yahoo, Google... They have money in various VC funds. Buying into YCombinator is consistent with that investing approach.
As SMC became more powerful, executives from SMC started moving into positions in the university itself. SMC moved its HQ onto the main campus. Not clear where this will end; we'll have to see who replaces Henessey as president.
[1] http://www.smc.stanford.edu/