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VC Competition Helps NU Students Decipher the VC Enigma

Venture capital (VC) can be an enigma, even for the most seasoned entrepreneurs.

What sort of entrepreneurs and businesses should be funded? What are the key aspects of a business to look at when gauging long-term returns and success? Should VC funding decisions be based more on the entrepreneur or the entrepreneur’s business idea?

The Venture Capital Investment Competition (VCIC), a day-long contest which rotates to different which rotates to a different Midwestern school each year, aims to teach student entrepreneurs how to tackle these enigmatic questions, and more, by putting them through a real-time investment test.

This year, Michigan State University hosted the VCIC on February 24th, 2018. Student teams were required to assess three startups for VC potential before making one selection to "invest" in. VCIC judges then assessed each student teams’ investment aptitude before selected a winner. First place finishers won a bid to compete in the global finals at UNC-Chapel Hill.

My VC team represented Northwestern University and consisted of fellow student entrepreneurs, Charbel Bourjas, Rafah Ali, Sam Kim, Sheridan Clayborne, and myself. Because our VC competition team had no prior experience with such competitions and because most other schools we were competing against did (in the form of internal VC competitions qualifying them for VCIC), my teammates and I knew we needed to prove that our preparation before the event would be more than enough to make up for whatever we lacked in prior experience.

In the two days leading up to the competition, we thoroughly discussed our approach to evaluating the pitch decks of the featured startups. On Thursday evening, as soon as we received those pitch decks, my team met and gathered the most important information from each the decks and financial statements. The next afternoon, we drove over to East Lansing, MI, in a motor pool van sponsored by the Farley Center for Entrepreneurship and Innovation, Northwestern’s entrepreneurship education center. To further maximize our limited preparation time, our team resumed our work immediately after checking into our hotel. There, we developed metrics and a plan of attack we could use to evaluate the companies whose pitch decks we had reviewed the day before.

The next phase of the competition began Saturday morning. After hearing each of the startup’s pitches, we were given 14 minutes to conduct “due diligence” interviews with each startup entrepreneur. This portion of VCIC was the first true opportunity we had to impress the judges who sat close by as we grilled each entrepreneur on his company’s strengths, weaknesses, and sought answers to any questions other we had.

While we had lunch, we created and submitted deliverables explaining which company we decided to invest in—and why—using the metrics we had developed the previous night. The afternoon concluded with a meeting with VCIC judges who acted as partners of our competition firm. In the meeting, we rationalized our investment in a startup called Avidcor, a cardiac monitoring device capable of measuring heart rate, rhythm, pulse oximetry, and temperature due to its traction, team, and market knowledge and market impact.

A much-needed, hour-long break was then given to all of the contestants while VCIC competition judges evaluated the performance of each student team. By that point, we were exhausted by the events of the day. We were also appreciative to have had the opportunity to enter such an exciting competition. At 3:30 p.m., the competing teams were called back to the main conference room for the awards ceremony.

We were pleasantly surprised when it was announced that our team, named “Cherry Capital” for the event, placed 3rd overall in the competition. Despite our lack of VC competition experience, having diverse members with different levels of entrepreneurship experience and our team making thorough preparations before event day contributed to our success. We also believe that with a bit more coaching and knowledge of the work that needs to be done before similar competitions, future Northwestern VC competition teams can vie for first place, and with it, a chance to compete at the global finals.

The experience helped me to discover many answers to important VC questions that many entrepreneurs face and proved to be one of the most engaging learning opportunities during my Northwestern career.

Click here to view more information about the "Cherry Capital" VC team

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