Going to business school, we all assume we know a good business when we see it. Many of us go so far as to believe we have what it takes to spot the next Instagram or Airbnb. At the Venture Capital Investment Competition, me and my fellow MBAs got to put our skills to the test. Competition was fierce.
The goal of the VCIC competition is to mock the venture capital process of selecting a start-up to invest in, pitching that investment to the managing partners of your VC firm (the judges), and then handling negotiations with the entrepreneur to seal the deal and make an investment.
The day began with Denmark’s finest pastries and a coffee truck arriving to get the contestants, entrepreneurs and judges started for what was a long, grueling, and incredible day. Those of us participating had received packets of the start-ups information including business plans, financials, and other collateral just two days prior. We had then spent the 48 hours leading up to the competition researching industries, competitors, Linkedin profiles of board members, and pretty much any bit of information we could find to get a solid understanding of each start-up. By the time the competition day arrived we were ready to go with our decisions all but made.
After a round of pitches from the entrepreneurs, we finalized our questions for our round of due diligence. Due diligence consisted of twelve minutes Q&A between each team and each entrepreneur. After the Q&A, we were given feedback from the observing judges. This was an essential piece because we had to quickly pivot our due diligence questioning technique to adapt to the feedback.
The team that won the “Entrepreneur Award” (the entrepreneurs voted them the team they most liked working with) focused their due diligence session on learning what the entrepreneur was looking for from the VC. The final question they asked in each round was “What keeps you up at night?”. In the VC world, the relationship between a VC and the entrepreneur is essential and can ultimately be what makes or breaks a deal or even the company as a strong partnership can lead to essential collaboration.
The most challenging part was the partner meeting. The questions were deep, well thought, and delivered like rapid fire. It was brutal, but most of my classmates’ favorite part of the competition. The winning team truly excelled here, handling the judges questions and coming across strong while conceding necessary alterations to their term sheet. The judges were very impressed by both their technical skill in crafting and defending the terms, as well as their political maneuvering to keep the conversation going.
In the end, every team brought their A-game. Two teams made it to the negotiation round and Team K-Ventures won first place. They will be representing CBS at the regionals in Cranfield and we are sure they will do us proud.
The experience overall was amazing and I would highly recommend the program to all future MBA students whether they have an interest in VC work or not.