The Organizer’s Perspective
A few weeks ago, five teams of MBA students competed in an internal Kellogg Venture Capital Investment Competition (VCIC). The student teams evaluated the business plans of three local, early-stage startups, then prepared and negotiated term sheets with entrepreneurs while being judged by local venture capitalists. Our goal was to identify the most qualified team for the regional VCIC competition, while providing a valuable real-world experience for students interested in venture capital careers.
This also marked the first year that we ran the internal VCIC at this scale, and it was a success by all accounts: The students found the experience to be valuable, and the judges were impressed with the caliber of our students’ performance.
I was initially concerned about pulling together this event on such a short timeline and with minimal resources, but we were fortunate to have the generous support of Kellogg faculty and alumni. In particular, Linda Darragh and the KIEI team, Professors Yael Hochberg and Bill Sutter, as well as several KSM alumni and local venture capitalists Kapil Chaudhary and Gabe Greenbaum.
We look forward to building on the success of the event in subsequent years and are pleased to announce the winning team has continued their streak by winning the regional competition in Boulder, CO!
Patrick Merfert is a 2nd-year Kellogg student and Venture Capital Director of the PE/VC club.
The Competitor’s Perspective
Kellogg recently held its first Venture Capital Investment Competition or VCIC. I was excited to compete in the kickoff event, as were my teammates K.C. Li, Megh Gupta, John Shen and Omri Buzi. We received the entrepreneurs’ pitch decks Tuesday night and immediately got together to discuss our potential questions to see if we could identify the winning business model. The startups included an online career matching solution, a manufacturing platform for custom products and a diagnostic device for stress urinary incontinence.
Wednesday morning, we made our way to a large classroom at the Jacobs Center where the three entrepreneurs pitched to us for about 15 minutes each. Each competing investment team had one-on-one time to conduct due diligence with the entrepreneurs. We learned a lot about the startups’ business models that morning, and each had a lot of merit. It helped that every one of my teammates had some experience in at least one of the industries represented.
In the end, we felt the medical device presented the greatest investment opportunity. We conducted a fast valuation in the few hours we had remaining, wrote up our term sheet and prepared for the negotiations with the entrepreneur. The energy in our small study room was palpable. I felt like I was back in my first year as an investment banking analyst.
At the end of the day, we met with the entrepreneur, who so graciously negotiated the terms and valuation with us. The judges were a bit more direct during the Q&A. Our valuation appeared to be spot on, as was our due diligence; however, they managed to poke several holes in our term sheet. Though we did not end up winning, the VCIC competition was a great experience. As a budding entrepreneur, I picked up valuable knowledge that will help me as I go forward with my own startup idea. One day I may be negotiating terms with my own potential investors.