With rising inflation and a stock market on the rocks, any big investment is worth watching. And with researchers reporting poor returns on student achievement in assigned schools during the pandemic, this makes any investment in education even more notable.

So with venture capitalists betting big on Prenda last week, committing $20 million to advance the company’s activities, parents and families around the country should take notice.

Prenda forms “microschools,” which are what they sound like: small learning communities of 10 students or fewer. The company caught parents’ and lawmakers’ attention during the pandemic as traditional schools were closed for in-person learning. Families looked for alternatives, and the learning pod and microschool models offered hope.

With a learning pod, parents led small groups of their own children, along with the children of their friends and neighbors, in learning groups that resembled homeschool co-ops. Microschools are similar, though organizations such as Prenda and Acton Academy Affiliate Network help create these small schools that are similar to reduced-size private schools.

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Not all the attention from lawmakers was good. In fact, policymakers around the country tried to impose rules and regulations that treated microschools and learning pods like at-home daycare operations. Daycare regulations can be overly bureaucratic and apply to children who are younger than school age, making the rules a poor fit for microschools and pods.

The collision of heavy-handed regulation and increasing learning pod enrollment risked crushing these viable civil-society responses to school closures during COVID.

Some state officials recognized the mismatch between daycare rules and the new learning innovations, though. In West Virginia, lawmakers adopted a proposal earlier this year that allows for the creation of learning pods and microschools. State officials defined learning pods as “voluntary” associations of parents that may or may not involve tuition payments, allowing parents to educate their children at home and the children of friends and neighbors who are not satisfied with the options at an assigned public school.

Parents will measure student progress with nationally norm-referenced tests or other assessments, providing transparency for families and taxpayers. West Virginia’s proposal also protects the creation of microschools, in the form of small, private schools.

Nationally, public school enrollment has dropped by 1.2 million children since 2020. In West Virginia, public school numbers have fallen by 21,000 children since 2017. Whether this signals widespread parent dissatisfaction with assigned schools or that students are falling through the cracks—or both—parents and children need options outside the assigned system.

Which brings us back to learning pods and Prenda.

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The company has expanded well beyond Arizona today and serves some 3,000 students in six states across 300 microschools. The company has announced that it will be expanding into other states. For West Virginia families, the new learning pod and microschool law will not jeopardize families who choose to homeschool. But families can also create their own learning pod, and parents can apply for the state’s new Hope Scholarship, an education savings account option that also originated in Arizona. Families should even be able to use the Hope Scholarship to create a microschool, which makes Prenda’s expansion so notable.

Federal officials have sent some $200 billion in taxpayer resources to schools during the pandemic, and, as of last fall, some $150 billion remained unspent—all while achievement scores and enrollment are falling.

Meanwhile, savvy parents are now making more choices about how and where their children learn, in West Virginia and elsewhere. The savvy investors are watching.