While professional golfers vied for the coveted green jacket of The Masters Golf Tournament, MBA students from around the world traveled to Chapel Hill, NC, in the golf-themed international finals of the Venture Capital Investment Competition (VCIC).
Since 1998 UNC Kenan-Flagler has hosted the annual VCIC finals to give MBA students a glimpse into the high-pressure world of venture capital. VCIC, which condenses the entire investment process into three days, allows students to play the role of venture capitalists, hear pitches from real entrepreneurs, evaluate deals and invest in the most compelling business plan. The 16th annual competition took place April 11-13, at UNC Kenan-Flagler and the American Underground, the newly renovated basement space of a tobacco factory that houses more than 100 local startups.
This year 1,200 students from 60 leading international business schools competed at school-wide and regional VCICs to earn a spot at the finals. The top ten teams were invited to “The Masters,” where they navigated “nine holes” of entrepreneur pitches, due diligence sessions and negotiations. Georgetown’s McDonough School of Business ended up topping The Masters’ leaderboard, earning a $5,000 prize.
The business plans presented at this year’s competition ranged from AEGIS, a medical device firm focused on solving the problem of chronic urinary tract infections, to D-Shape, the company behind the world’s largest 3D printer. VCIC alum and CEO of Semafone Tim Critchley also returned to Chapel Hill to pitch technology that allows businesses to securely accept credit card information over the phone.
After short presentations from the entrepreneurs, teams met with them one-on-one for due diligence sessions that gave students 13 minutes to fire off as many questions as they could about the business plan, current data and expansion potential. Each team then selected one project to “invest” in and structured a deal for the chosen entrepreneur to review.
“What we looked for in a partner was a thorough business plan and creative ideas but also passion,” said Eli Stoughton, an MBA student on the Kelley School of Business team. “One of the best parts of today’s competition was seeing entrepreneurs who have really poured their heart and souls into their business.”
Just as they would in a real-world investment, teams must negotiate the set of terms with the entrepreneur. After reaching a deal the teams had to convince a panel of actual venture capitalists that their investment decision is sound and will provide a reasonable return given the inherent risk in the deal. Finally, the judges must choose a winner— the MBA team they would most like to have as their partner based on their evaluation of the teams' assessment of risk, knowledge of the venture capital process, communication skills and teamwork.
“To be successful in the competition, students must pull together a number of different elements from their MBA courses—business communication skills, the ability to negotiate and build rapport with potential partners and how to apply one’s knowledge outside the classroom,” said UNC Kenan-Flagler program manager Carrie Harbinson, who helped organized the event. “I think MBA students from around the world continue to love VCIC year after year because it’s challenging and dynamic.”
The contest is more than just a learning opportunity for students. It’s also a “micro-accelerator” that connects entrepreneurs to potential investors and allows venture capitalists to get a sneak peek at some viable deals. Around two of the five proposals at the finals will go on to receive funding.
“In addition to meeting all of these venture capitalists, we got the chance to try out our new business plan and get a lot of world-class MBA students looking at it, giving us feedback and doing the deep dive,” said Ian Campell, co-founder and COO of NextInput, a force sensitive touch technology that the winning Georgetown team chose to invest in.
VCIC gives students, entrepreneurs and judges ample time to network. Students were able to sit down with judges and receive personalized feedback during round-robin sessions after the competition, as well as mingle with other venture capitalists and entrepreneurs at the VCIC networking night. After “The Masters” winners were announced, participants were even able to hit the green together at a putting course on the UNC Kenan-Flagler lawn.