Venture Capital Investment Competition at USC in Los Angeles
Mar 8 2008

For the past few years I have served as an Advisor to The University of Texas at Austin MBA team that competes in the Venture Capital Investment Competition (VCIC).  

It all started when I was an adjunct lecturer of entrepreneurship at UT Austin and since then I’ve continued to advise as they need me and my schedule permits.  This competition did not exist when I got my MBA, and even if I had the opportunity to participate I was too busy trying to start my first venture.  What a plus it would have been for any entrepreneur to have seen a term sheet presented by experienced investors in an academic environment rather than in real life when you feel like you have to learn another language just to understand parts of the investment terms!

This year the regional competition was held at USC in LA on March 7, 2008.  The UT team this year was comprised of:

Ben Jones – MBA 2008
Kyle Reese – MBA 2008
Rajiv Bala – MBA 2009
Ryan Sanders – MBA 2009
Scott Chiou – MBA 2009

I connect them with local venture capitalists and entrepreneurs to help them prepare but we had a late start with only about 5 weeks to get ready and midterms in between this year.  Other teams have semester long classes to prepare for this competition!

At the competition, 6 teams were given business plans for 3 real companies including NiLA, makers of environmentally friendly lighting, on Wednesday, March 5 at 5:00 pm.  They use the Internet and other relevant sources to research the companies and come up with questions for the entrepreneurs.  On Friday, they heard the entrepreneurs pitch their business concepts in front of 11 real live venture capitalists, including Aditya Mathur of Revolution Ventures, Nathan Joyner of Pacific Ridge Capital, Neal Hansch of Rustic Canyon Ventures, representatives from Tech Coast Angel Group and many more. 

They then go into little rooms and subject the entrepreneurs to answering several of the same questions over and over again from the 6 different teams.  Why would any entrepreneur do this you might wonder? Because the VCs are in the room while they are being asked the questions so they are getting exposure that they might not have had otherwise to them.

After the questioning sessions are over, the teams again regroup and come up with a PowerPoint presentation which outlines which company they would chose to invest in and why.   For the company they choose to invest in, they create a term sheet.  They present their choice in 3 minutes in front of the VCs.  The VCs then grill them for about 15 minutes on their company choice and investment terms.

At the end of the day, the judges decide who wins and who takes 2nd place.  The 1st and 2nd place winners get money and the opportunity to compete in the national competition at University of North Carolina Kenan-Flagler Business School in April.  I have personally seen one student get a job on a team I advised in venture capital because of participating in this competition.

As an advisor I get to be a fly on the wall and watch the VCs deliberate and observe the decision making process.  Plus I build my network in areas outside of Austin.  Personally, I believe this experience has helped me gain better perspective on what venture capitalists are looking for which is why I’m currently seeking money from angel investors or smaller boutique/seed stage venture firms. 

So I’m sure the suspense is killing you as to whether or not our team placed and unfortunately they did not. They picked the company with the biggest market potential but with the highest risk and the VC judges picked NiLa, which has a great opportunity but less risk and less upside.  Goes to show you that most VCs are not early stage investors!

There are so many variables that go into winning from judges backgrounds, to student’s experience, to understanding of the market of the presenting companies, etc. that you can’t always prepare for everything.  But what an experience! 

Flying back to Austin today for SXSW Interactive and will post about my experience as a newbie SXSW attendee.  I’m looking forward to meeting many of the people I’ve met through blogging and twitter!

Author: | Filed under: competition, entrepreneurship, fundraising, venture capital | Tags: , , , , , , , , , , , , , , , | 2 Comments »

2 Comments on “Venture Capital Investment Competition at USC in Los Angeles”

  1. 1 fred wilson said at 10:19 AM on March 8th, 2008:

    great stuff. i wish i could participate in more stuff like this.


  2. 2 Kyle said at 7:31 PM on March 8th, 2008:

    Thanks again, Aruni. The training leading up to the competition definitely had a deep impact on us, and we appreciate all that you did to help us prepare.

    I wouldn’t change our investment decision, but the competition definitely shaped my perspective on how to present it. This was a tremendous experience for all of us, and I’m definitely glad I had the opportunity to participate.