Venture Capital Competition Nets Students $2,000 Prize
The world of venture capitalism is highly competitive. Every year, analysts at venture funds screen hundreds of investment proposals to find just the right ones for their firms. And once identified, the analysts must then defend their choices in competition for the scarce partnership resources of time and money. When they pitch a proposed deal to their partners, they must know their subject inside and out – and they must be ready for tough questions.
A competition sponsored by the Golder Center in the College of Business and with the generous support of IllinoisVentures seeks to mimic that world and prepare undergraduates to respond to these challenges. In mid-November, nine student team finalists participated in a venture capital competition with a top prize of $2,000. Their challenge? Convince their “Senior Partners” that a proposed investment was worthwhile. Teams were given a week to analyze the business plan of their subject, a specialty toy retailer selling only on the Internet and promoting an online parents’ community. They then developed an investment thesis and proposal and made their argument to the panel of judges.
The judges, including senior VC’s from IllinoisVentures, Arch Development and Ceres Venture Fund, played the role of the senior partners and grilled the teams with tough questions on the proposed investment. “What due diligence will you perform?” “How will you avoid cash burnout in the first few months?” “What if it takes twice as long and costs twice as much?” “Who is the competition, really, and what will be your positioning?” The students had to think quickly on their feet, and while there were only three winning teams out of the nine finalists, organizer Dan O’Connell said it was valuable experience for every one of them.
“I am delighted to have you all here,” O’Connell, director of the Golder Center, said just before he announced the winners. “I know it’s a real learning experience for each of you to be put through the ringer and to come out shining. Also, I get to show off our incredible student talent to professionals such as our judges here. I cannot emphasize how incredibly difficult it was to pick the top three winners from the high caliber of work demonstrated here today.”
In its second year, the Venture Competition has grown from just three teams to the nine who competed this year. While venture capital competitions are currently held for graduate students at universities around the country, the College is unique in that its competition is meant specifically for undergraduate students.
“As far as I know, this is the only competition of its kind meant for undergraduates and is very similar in terms of the analysis and deliverables required to the graduate competitions held around the country,” said O’Connell.
In preparation for the competition, students attended a series of workshops to introduce the workings of a venture firm and to polish their analytical and presentation skills. They were ultimately judged on the strength of their investment argument and the depth of their understanding of some very complex issues. Three teams came out on top.
First place and $2000 went to Team Triple Threat, sophomore Alina Gunko, senior Jennifer Hwang, and junior Andrew Rawlings. Team Local Celebrities, seniors Dan Wallenberg, Dave Hoffer, Dave Sekowski and Amy Matsuhashi, took second place with winnings of $1250, while last year’s winners, Team Juggernaut, finished third. Seniors Tim Bosslet, Casey Lindbeck, and, Sebastian Rymarz, and juniors Eric Nichols and Ryan Hoffman will split a $750 prize.
“Look out for the next competition which will be held this spring,” O’Connell said.