The past thirty years have seen dozens of otherwise successful investors try to improve education through the application of market principles. They have funneled billions of dollars into alternative schools, online education, and textbook publishing, and they have, with surprising regularity, lost their shirts.

In Class Clowns, professor and investment banker Jonathan A. Knee dissects what drives investors' efforts to improve education and why they consistently fail. Knee takes readers inside four spectacular financial failures in education: Rupert Murdoch's billion-dollar effort to reshape elementary education through technology; the unhappy investors—including hedge fund titan John Paulson—who lost billions in textbook publisher Houghton Mifflin; the abandonment of Knowledge Universe, Michael Milken's twenty-year mission to revolutionize the global education industry; and a look at Chris Whittle, founder of EdisonLearning and a pioneer of large-scale transformational educational ventures, who continues to attract investment despite decades of financial and operational disappointment.

Although deep belief in the curative powers of the market drove these initiatives, it was the investors' failure to appreciate market structure that doomed them. Knee asks: What makes a good education business? By contrasting rare successes, he finds a dozen broad lessons at the heart of these cautionary case studies. Class Clowns offers an important guide for public policy makers and guardrails for future investors, as well as an intelligent exposé for activists and teachers frustrated with the repeated underperformance of these attempts to shake up education.

"What I liked: This in-depth look into a segment of the investment world I'd never really given much thought to before.... What I loved: How many parts of Class Clowns read just like a novel." - Better Investing

"[Class Clowns] is as much about bone-headed bets on tech as it is about the challenges investors have in navigating America's educational system." - The Street

"A tough-minded study that shows there's gold in them there halls, but getting to it is a problem—or, an entrepreneur might say, a challenge." - KIRKUS REVIEWS

"A stunning new book." - Radar Magazine

"It is easy to nominate irascible, contrarian, eloquent and, as well, one of the leading bankers in the media sector, Jonathan Knee, as the nation’s best business writer. . . . Class Clowns deconstructs a series of deals in the continuing bubble of the private education market. The allure of ever-increasing spending, combined with a desire among rich men to do good, or believe they are doing good, results in a series of delusional assumptions and vast shareholder losses." - USA Today

"A valuable addition to our knowledge base regarding education markets... Class Clowns prosecutes a very sound case that investors must beware when entering the educational space." - Chicago Tribune

"Timely...filled with stories of hubris and myopia, of a failure to understand the field of education and, indeed, in some respects even the basis of success in business outside the celebrated investors' traditional field of dominance." - GLOBE AND MAIL