The Kellogg Venture Capital Investment Challenge (VCIC) was first introduced during the 2012-2013 academic year, and is sponsored by the Kellogg Innovation & Entrepreneurship Initiative (KIEI). The purpose of the challenge is to select the team that will represent Kellogg in the national VCIC, run by the Kenan-Flagler Business School of the University of North Carolina.
In advance of the Kellogg VCIC, students receive training on how venture capital firms conduct due diligence, prepare term sheets and negotiate with entrepreneurs. The competition draws upon the Kellogg alumni community, as well as Chicago area venture capitalists and entrepreneurs, providing students with the opportunity to gain real-world feedback during mock negotiations. The Kellogg 2012-13 team secured the top spot in the Venture Capital Investment Challenge central region competition.
This year, a team of five students took first place in the competition, and will represent Kellogg at this year’s regional competition, held today at the University of Texas. Ty Findley (far left in the picture above), one of the winning team members, discusses the value of the experience and what he’s learned about venture capital, below.
Written by Ty Findley
As someone interested in working in Venture Capital after Kellogg, the Venture Capital Investment Competition (VCIC) offered the perfect opportunity to put a lot of Kellogg academic preparation into action. From the Venture Capital prep seminar to the difficult case studies in Entrepreneurial and Venture Capital Finance, Kellogg is doing an excellent job providing me with the foundational skills required to think like a venture capitalist during the competition.
Our team was able to refine our diligence techniques on actual Chicago startups and ultimately justify our investment decisions to local venture capitalist judges, who scrutinized everything from our valuation methodology to the term sheets we crafted.
To take it a step further than the classroom variables, the judges actually critiqued our ability to connect with the entrepreneurs on a personal level. They also assessed how we handled a live negotiation round to craft a win/win relationship between our team and the startup going forward.
The competition structure was truly reflective of the daily reality that venture capitalists live in, and it was a privilege to have an experiential learning opportunity like this to learn from their insights.
Through the rigors of the competition, our team took away many lessons that we will take forward in our careers. Below are a few noteworthy takeaways:
- The power in having a diversified skill-set among VC partners
- How to leverage multiple valuation models to value an early-stage company
- Crafting a term sheet reflective of risk levels and geographic preferences
- Deeply understanding a management team’s strengths and skill gaps
- Rapidly aligning diligence efforts toward the company’s biggest risks
Overall, we learned a ton about Venture Capital, made some great industry contacts and had a blast as a team working with each other. Now off to the Austin Regional and build on our ultimate hopes to bring home the first ever Kellogg VCIC International Championship.
Editor’s note: Kellogg took third place at the VCIC central region competition.