U Chicago Takes VCIC Finals

I returned yesterday to the home office, after spending a few days as a judge for the VCIC Finals in Chapel Hill.

For the uninitiated, VCIC is a competition in which teams of biz-school students form mock VC firms and are asked to make investment decisions. They conduct due diligence with real entrepreneurs, submit term sheets, negotiate with the entrepreneur and then get pummeled with questions by more than a dozen judges (all of whom are actual VCs or LPs save for yours truly).

This year’s winner was the University of Chicago, which clearly stood alone among an extremely-talented field. In fact, I think five or six of this year’s teams easily would have won last year’s event. The UC crew was smart (asked the right questions), smooth (seemed prepared for most hiccups) and engaging (they understood how important it is to connect with a founder who may have multiple term sheets). Its members were:

  • Ryan Gembala
  • Gil Haberman
  • Matt Hankins
  • Josh Marehbian
  • Erin O’Neill

Second place was Oxford University, while UNC placed third.

More than one thousand B-school students participated in VCIC this year, either via internal competitions, regional competitions and/or the finals. If you are a VC scouting for young talent, I would suggest you participate next year. There’s a great new crop of investors just waiting to be groomed… Also would recommend it to first-time entrepreneurs in search of funding, as it’s a great way to get lots of due diligence practice without penalties for messing up.

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4 Comments

  • I too was invited to judge a while ago. While a fun experience and well run from a logistics point of view, the contest explained to me why many VCs (with just this business school type experience) are struggling to recognize real innovation.

    None of the contestants knew at the time of the investment decision what an ASP to a customer was or what the conversion rate was of the product/service that was being proposed. In fact, very few understood what the business was all about when questioned. A lack of understanding of conversion rates (from prospect to customer), makes it impossible to accurately assess how and when a company will be able to cross the chasm, and how much risk that requires.

    It is one thing of understanding the mechanics of investing (for which I deploy lawyers, and then simply verify) to which perhaps this contest was a nice test, but to suggest that therefor the output of this yields investment professionals is a big leap and perhaps the source of why Venture has not yielded better returns in the past.

    Best,

    Georges

  • Georges,

    I cannot speak to your experience, but can say that the competitors I saw dug deep into the technology and technology risks. They obviously cannot know everything about a company or sector given the competition’s time constraints — and given that they view four companies in different sectors. But for what they’re given to work with, I think they were superb.

  • Thucydides, Herodotus, Peloponnesian War
    x squared, y squared, H2SO4
    who for? what for? what in the hell are we fighting for?
    Goooooooo Maroons!

  • Dan,

    Could be, I spoke to Vernon about it (right after my session) and just wished the focus was more on understanding the important business metrics (not the whole business) that makes for an accurate assessment of risk. Risk is not determined by knowing everything, but understanding the risk of the things you do not know. And therefor you cannot assess risk if the crucial business criteria you do not know (customer conversion rates) is ignored.

    Best,

    Georges

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