Last week, I competed in the Mid-Atlantic regional round of the Venture Capital Investment Competition with four of my classmates at CBS. After a full day program, we won the competition and we’re now gearing up for the nationals in April, which will be hosted by UNC. Here’s the website if you’re curious about the format/structure.
Some thoughts on the day/process without disclosing anything specific about the companies. I also don’t really disclose our secret sauce because we still have a national ‘ship to win.
– Teams of ~5 students from a bunch of top business schools around the country/world compete in school-wide competition, then the school champs move on to regionals and regional champs move to nationals.
– Wednesday 5PM- all competitors receive pitch decks for three startups. We also received our “fund profile” – we have $XXMM AUM and primarily focus on X stage investments.
– Wednesday 5PM- Midnight- the CBS team (myself, Rick, Jen, Patrick, Graham) burn through the pitch decks, deep dive the industries and pour over the details as preparation for Friday’s competition. Also discussed our fund’s strategy/investment thesis as it relates to these three companies.
– Thursday 9PM- get in Graham’s car and drive down to College Park, MD. Arrived around 1AM. Topics of discussion in the car ranged from company specific strategies for VCIC, to logistics for Columbia’s upcoming PEVC conference, to how chill high school lax is.
– Friday 9AM- Rise and grind- At Maryland’s Smith School of Business, we watch some opening remarks, then see each of the three entrepreneurs pitch us their companies for 10-15 minutes.
– Then we were escorted to our private room by our hostess and discuss the upcoming due diligence meetings.
– Friday 11AM- Run due diligence meetings with each of the entrepreneurs in front of 2-3 judges. Judges are angels and VCs from the area. Judgement criteria is on the VCIC website, but it essentially comes down to how well you run an initial DD meeting with a founder. We spent a lot of time preparing for these. We really tried to show that we are knowledgable not only about the company, but about the industry and venture investing in general.
– Next we select a company to do a term sheet negotiation with. We debated everything you’d expect- strength of founding team, market size, go to market strategy, CAC/LTV, etc, and we also debated some more heady issues like founder incentives vis-a-vis cap table math.
– Later in the afternoon, we had our term sheet negotiation with our chosen company. This time, we held the negotiation at a table in a lecture hall with all of the judges (7 or 8 in total) and all of the other teams who hadn’t yet done their own negotiation. In total there were about 50 people watching, which is not the most natural atmosphere for a meeting. 5-on-1 meetings are also a bit awkward, but we handled it well. We negotiated on a term sheet for 15 minutes (hard stop), then fielded 10 minutes of questions from the judges about our strategy and decisions.
– After all teams negotiated with their chosen founder, the judges went into a separate room, deliberated and ultimately announced the winners.
– The day ended with a great networking reception for all contestants, founders, judges and organizers (Smith MBA students).
This was a very well-run event. While this is not how venture meetings/deals are done in the real world (one day, 30 total minutes with founder, no real deep DD, etc), VCIC does an awesome job simulating many of the important things in early stage venture investing: asking real, meaningful questions, building rapport with founders, moving quickly toward a decision, rapidly understanding business models and debating among investment partners. Overall, this was a fun challenge and we’re looking forward to nationals in April.
PS Also, I got to pull a Happy Gilmore and tick “receive oversized prize check” off my bucket list: