“Do you desire the fire of a business battle royale? A spectacular clash of Booth smarts, charismas, and egos? Come and see the struggle, the stakes, the glories of victory, and the agonies of defeat, the names of the winners, and the shame of the losers, and see our school’s champions of venture capital chosen to go and dominate every other school in the world!”
You do not get an email like this everyday, but when you do, the game is on! This is what happened a couple weeks ago when I participated at the Energy Foundry Venture Capital Investment Competition (VCIC).
Luckily, I was in one of the 6 teams selected to compete at this hackathon-like event over three days, which allows students to think and act as real venture capitalists to select companies, create valuation, and negotiate term sheets.
The wining team will have the opportunity to represent Booth for regional and national intercollegiate competitions. Experienced investors act as judges and evaluate students’ interactions with real-life entrepreneurs. Here’s the rapid fire rundown of how it looks from the participants’ point of view during the competition:
On Wednesday 5pm sharp, all contestants receive pitching deck and information about the three companies that are potential candidates to invest.
During Wednesday night and Thursday whole day, each team needs to choose the company in which to invest, identify the top questions to ask during the meeting with the entrepreneurs, and prepare the valuation and term sheet. It is easier said than done when “picking the right horse” because this year all three companies are arguably VC “investable,” resulting in a hard time for us to finalize our initial decisions. For example, we have to give up another strong candidate based on our assumed, large fund size, which requires a higher return.
Then on Friday, the game is on. In the morning, the teams rotate around to meet the entrepreneurs from all three companies and ask questions with judges witnessing how teams build rapport and ask key questions during the meetings. After speaking to all entrepreneurs, the teams are allowed to have about one hour to finalize the valuation and term sheet, which will be presented to the judges in the afternoon in a form of “partner meetings.” During these meetings, the teams explain the investment decisions and terms in a similar way to how investment committees in the funds are making decisions.
Finally, two teams are selected to be on stage and negotiate the term sheet with the selected entrepreneurs.
As one can easily imagine, it was an exhausting process indeed but with a lot of fun. When 6 of us got stuck in the room for the whole day, we really got to know each other a lot better, let alone valuable networking opportunities for all attendees.
Previously, Booth has brought the second and third places from the regional finals. Knowing the people in the team and seeing their performance on the day, I believe we have enough reason to believe that the trophy will come – GO Tectonic Ventures!
