Digs co-founders Patrick McLoughlin and Chad Johnson

A company started by Miami University alumni has been acquired by a larger company, a win for the startup and for the student-led venture capital firm at the Farmer School that invested in it.

OJO Labs announced the acquisition of Digs, a personal finance platform designed to help renters interested in buying a home save for that goal. The FDIC-insured platform helps consumers set and track savings goals, learn about the buying process, and understand credit, all in a single app.

Digs was started by Patrick McLoughlin (MU ’10 in architecture and entrepreneurship) and Chad Johnson (MU ’10 in architecture) in 2018, thanks in part to a $25,000 capital investment by RedHawk Ventures. Established in 1997 with financial support from Procter & Gamble, RedHawk Ventures stands as one of the few venture capital funds in the nation that is entirely run by undergraduate students.

“Our mission statement is twofold. We're educating students in venture capital, and then getting them the outside experience, such as internships or working with real companies and real funds to promote and further their education,” managing director Jack Sherlock explained. “Second, we want to be the first source of capital for Miami alumni or Miami students. When they're starting their company or thinking about raising money, we want them to be turning to the university first to see where we can help.”

That help can extend far beyond cash, Sherlock said. “We can plug them into an accelerator run by entrepreneurship professor Mark Lacker, or we can get them into an innovation class run by Tom Heuer” he explained. “So we offer our startups a range of help.”

Sherlock said that RedHawk Ventures made its maximum-allowed $25,000 investment with McLoughlin and Johnson because it would help bring in another investor, who would match and add to the amount. He noted that Digs’ success came about because of what it could offer beyond advice and help for consumers. “Their big money comes from opportunities from the mortgage brokers. You have these firms that are constantly asking, ‘Okay, who can we lend to? Who's about to make a home purchase? Who's a safe lender?’ You have Digs, who is going to be your lead generator for people who have saved, people who are educated, and people who are ready to make their first home purchase.”

“Our mission is to help consumers reach their goal of homeownership and continue to build wealth,” McLoughlin said in a news release. “Access to financial resources is limited and often generalized, leaving many aspiring and current homeowners without guidance. This is a massive problem and OJO Labs recognizes it. They are the perfect company to help us achieve our mission at scale.”

Laura Mena, a 2020 marketing and entrepreneurship graduate, was RedHawk Ventures'managing director when Digs’ founders were looking for capital. “In the fall of 2018, when RedHawk Ventures invested in Digs, our team identified Pat & Chad as two high-potential alumni developing a unique solution to a large-scale problem. Our due diligence process led us to believe that Digs would be a successful addition to our portfolio but beyond just that, we noted the opportunity this investment would bring in connecting a young startup with the Miami entrepreneurial ecosystem,” she remarked. “I am extremely proud of both Pat & Chad as well as the RedHawk Ventures team for this accomplishment!"

“RedHawk Ventures was our second investor and their investment helped us launch our initial product. It was nice to have our alma mater support us in the earliest days!” McLoughlin said.

The acquisition also marks the first exit from RedHawk Ventures' current $500,000 fund. But Sherlock said RedHawk Ventures is hoping to turn Digs’ acquisition into more than money, as Mena said Digs had already done so far.

"Since that investment, Digs has taken interns from the Altman Summer Scholars Program, participated in the Venture Capital Investment Competition Central Regionals while also giving Miami students the chance to learn the qualities of a high-value startup,” Mena said.

“I think with us working with Pat and Chad, they can make some great introductions to OJO Labs. Hopefully, we can incorporate OJO labs into the Miami ecosystem and use them as a resource. Or more importantly, get interns or other students involved in their company as well,” Sherlock said. “RedHawk Ventures is not going to be an investor anymore, but that doesn't mean that we can't try and create some strong opportunities for the entrepreneurship department and the Farmer School of Business.”