The last Ivy League school to be established was Cornell in 1865. Now, nearly 150 years later, Ben Nelson, former CEO of Snapfish, is introducing a new university similar to the Elite Eight. Called The Minerva Project, the online school has raised $25 million, the largest seed round in Benchmark Capital’s history.

Nelson noticed a number of things missing in today’s Ivy League institutes, the biggest being capacity. “Over the last 25 years, the elite schools in America have largely frozen their class size,” Nelson says. This year, Harvard’s acceptance rate was at a record low, 5.9 percent, and Yale wasn’t too far behind at 6.8 percent. Interest continues to grow, however, as Nelson remarks, “the demand for elite higher education in the United States has gone through the roof.”

As the universities evolved with the times and continued to grow in number and class size, they also adapted to the market and grew to its demands, raising the price of education. That’s where Nelson sees The Minerva Project fitting in. “The biggest thing we are solving for is that incredibly smart, incredibly hardworking students — mostly middle class — are being left out of the elite system,” he says, which is why he intends to charge somewhere under $20,000 in annual tuition.

How will the tuition cost stack up to the free online courses already being offered by MITx, Khan Academy and other ventures? “We encourage classes on MITx,” Nelson says. Yet, they’re encouraged because that’s where he sees students going for introductory courses, none of which will be offered at The Minerva Project. In Nelson’s eyes, why charge for something students can get for free elsewhere?

“What the core curriculum is, is the basis on how to think and how to communicate,” Nelson says. What The Minerva Project will do is ask students to watch a pre-recorded video lecture in real time, all while interacting over video chat with classmates and professors. Nelson claims students won’t feel like they’re one of 100,000 just watching a course, because “that’s not the role of elite higher education in their book.”

The Minerva Project will also have students clustered together in metropolitan areas, living in dorm-style apartments, which will allow for further collaboration and socializing. “The campus is the city,” Nelson says, also claiming they’ll be encouraging students to go and live in the different countries where The Minerva Project is offered while they receive their education.

Once a student graduates, however, the support won’t stop there. “We’re never going to be calling our alumni and asking for money,” Nelson says. “We’ll be calling and asking how their new project is coming. […] We’ll be their PR agency; we’ll find them funds to support their projects and businesses.”

The Minerva Project is expected to launch in 2014, and has already garnered the attention of Larry Summers, former U.S. Treasury Secretary and Harvard president, who will serve on the advisory board.

Should Harvard watch out? Can this online, for-profit school fill the void? Do you think this model is one that will stick?