Could the Next Elite University Be Online and Venture-Backed?

The Minerva Project says it’s planning to launch the first elite American university in a century. Sounds wacky, right?

But the project is starting to gather some heavyweight support: Former Harvard President and U.S. Secretary of the Treasury Larry Summers will chair its advisory board, and Benchmark Capital has committed $25 million, the VC firm’s largest seed investment ever.

Elite higher education is a stagnant market, argues Minerva CEO Ben Nelson. Far more people are qualified to get into top colleges than are admitted. Meanwhile, college education is too expensive and good teaching is undervalued. How can you address all that? By going online.

Unlike former Stanford professor and Google exec Sebastian Thrun’s Udacity, which started by offering a small selection of university-level classes online, Minerva plans to birth itself as a full alternative to college.

Minerva will be a virtual school, though it will encourage students to live together in dorm clusters around the world. It doesn’t plan to offer introductory-level classes — students will be expected to go to community colleges or take online courses to get up to speed.

To attract the best professors to contribute Minerva courses, the school will be paying them well and running an international “Minerva Prize” for the best college-level teaching, with a substantial cash reward.

As for admission, Minerva promises it will give “no weight to lineage, athletic ability, state or country of origin, or capacity to donate.”

Oh, and here’s the most ridiculously audacious bit of all of this: Minerva plans to admit its first class in 2014.

Here’s Nelson giving his pitch about “Taking on the Ivy League” last year at TEDxSF. Nelson was formerly CEO of SnapFish and chairman of RedBeacon.