VCIC - Venture Capital Investment Competition

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Real companies.
Real entrepreneurs.
Real business plans.
Real venture capitalists.
Real strategic competition.

VCIC - a real-world, one-of-a-kind, unsurpassed MBA learning experience.

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TIPS FOR PREPARING

Below is an excerpt from the VCIC Player Handbook (click to download entire PDF file).

Gone are the days when your very bright but unprepared team could arrive at VCIC and expect to make it to the next level. VCIC has become too competitive and the teams too sophisticated. Nowadays, one simple mistake can be the one that drops you from 1st to 3rd place and out of the running for the finals. It is no accident that the last five champions started by practicing at an event on their own campuses, the best way to prepare. Not unlike a sporting event, your ability to perform in the clutch will be a direct result of the time you spend training.

Why spend so much time preparing for VCIC? Because this experience will be one of the most rewarding things you do in graduate school. 98% of participants highly recommend VCIC, and 74% agree it was the “best educational experience of their MBA careers.” That’s 3 out of 4 saying it was the best! And the more you prepare for VCIC, the more you learn and the more rewarding the experience. Simply put: it is well worth your time.

With this in mind, I offer the following four suggestions to best prepare for VCIC:

1. Practice the VCIC Process

I put this #1 because there is no doubt that the best way to prepare for VCIC is to actually go through the process. Would you take the GMAT without taking a practice test? VCIC is a lot more complicated than the GMAT. Your team will be reading, researching, writing, role–playing, questioning, being questioned, rushing, formulating, formatting, fighting… Being acclimated with the process frees you up to concentrate on your winning strategies.

If your school does not already hold an internal competition, consider organizing a small one. This is by far the best way to prepare and the best way for your school to select the most competitive team. Half of the schools at the finals in 2005 started at some sort of internal competition. Even if you only recruit one entrepreneur to pitch to two teams, it will be a very rewarding experience for everyone involved.

If you cannot organize an internal event, recruit at least one entrepreneur with whom your VCIC team can practice. In a pinch you can use a student business plan team. Go through the entire VCIC process:

Review the business plan
Watch the entrepreneur's 10–minute pitch
Conduct a 15–minute due diligence session (this is role-playing and practice is extremely helpful)
Give yourselves a few hours to make a decision and prepare an executive summary and a term sheet summary
Present your analysis to coaches who can provide feedback on your work

You will learn a lot about the VC industry, the VCIC process and also about how your team works together, which will put you a big step ahead of teams who have never gone through it before.

2. Form a Diverse Team

The best teams have members with diverse backgrounds and skill sets. A good mix might include, for example, a numbers cruncher, an IT guru, a life sciences authority and a marketing whiz. It is also a good idea to make sure you have at least one expert presenter, a term sheet authority and a good negotiator. Strong communications skills are needed throughout your group. A diversity of industry backgrounds is also recommended, as the entrepreneurial ventures will be from various sectors.

Teams do not have to be exclusively comprised of business school students. PhDs, JDs and even MDs have done very well at VCIC. The only requirement is that all team members are graduate students enrolled at your university. This is a “team” competition, and judges are looking for depth.

3. Recruit Coaches

Through VCIC you have a rare opportunity to connect with potential mentors in your venture community. Whether you are organizing an internal VCIC or lining up coaches for your team, leading your school’s VCIC effort is a great way to network. You should seek out two types of coaches to help you prepare: VCIC alumni and VC professionals.

By “VCIC alumni” I mean anybody at your school who has experienced VCIC, including 2nd year students, graduates and your VCIC advisor. Have these coaches walk you through the VCIC process and help you create specific strategies for each step of the competition (see item #4 below). Put together a notebook to help next year’s team prepare.

The best VCIC teams will develop their own techniques for assessing deals by assimilating the experiences of multiple coaches, including venture capitalists, angel investors, entrepreneurs and lawyers that specialize in venture capital financing. Coaches can provide very valuable insight on industry trends and pre–money valuations for deals happening today. This information is often hard to find, and a coach can help a team establish what the appropriate ranges for different types of deals are. Valuation can differ across sectors, technologies and geographical regions. Understanding these subtle differences can have a profound impact on the success of a team in the competition. Have a VC walk your team through several recent deals done by his or her firm and explain what the key risks were in each deal, why the company was valued the way it was, and why the deal was structured the way it was. Also ask the VC to explain how a fund's investment decisions can be influenced by the fund's size, age, industry focus, intensity focus and geographical location. Show your coaches the sample fund profiles and talk about each point. At VCIC, you will need to have a holistic understanding of how a VC firm operates.

4. Create a Game Plan

VCIC judges have remarked at how sophisticated VCIC teams have become. Everyone is very smart and very well prepared. In this competitive landscape, teams with the best strategies come out on top. Below are some questions your team should discuss before arriving at the competition. Sit with your VCIC alumni coaches and review each point.

Activity	Think about your strategy
Before the competition: team formation	Do we have a well–rounded team? What skills and backgrounds do we have? Are we lacking in specific skill sets or industry knowledge? Do we need some coaching in those areas? Should we nominate a team leader? Should we nominate domain leaders? Should we assign duties prior to the event? Who is our team liaison with the competition? How will we make decisions?
At the competition: business plans	How do we handle the two hard–copy maximum rule (at regions)? How many plans do we each read? Should some of us do more than others? Do we have specialists who read specific parts of plans? Do we schedule team meetings to reassess as we go along? When do we need to stop reading and start researching? Should we stick together while reading or split up? How late do we stay awake working on this? When should we start in the morning? Do we rule out some plans as unfundable right away? Do we spend more time on some plans than others? Who is compiling lists of questions for each plan? Do we schedule meetings to discuss question lists?
Entrepreneur pitches	Do we need a strategy for taking and assimilating notes? Should we assign note–takers? Is there a specific format we should agree on? How do we incorporate notes we take during presentations into our Q&A strategies?
Due diligence sessions	Who asks the questions? Are we all equally skilled at asking questions? Should we have a question specialist? Is there someone who should not ask questions? Should we all ask questions to show our team depth? Who decides which questions to ask? Who decides when we move on to the next question or when we probe further for the information we are seeking? How do we handle talkative entrepreneurs? How do we handle reticent entrepreneurs? How much prep time do we spend for Q&A? How do we create "rapport" with entrepreneurs? What is our technique for getting good answers, not just asking questions? Do we have a tone we'd like to take? Are we friendly? Enthused? Poker–faced? Rushed? Relaxed? Controlling? Casual? Do we have a united "team" style? Do we have a specific strategy, like good cop, bad cop? Are we more interested in showing the judges what we know or getting information out of the entrepreneur? Do we pretend that we care about the answers even if we already know we would not invest in this entrepreneur? Should we express our interest or apathy in the deal? Should we try and negotiate deal terms during the session? Should we use the same strategy with all entrepreneurs or try different techniques?
Decision–making	How do we divide the research? How do we make decisions? What if there is a tie? Who takes the lead? How can five people work on this constructively? Do we put time limits on when decisions have to be made? How late do we work on this, and how early do we get up?
Executive Summary and Term Sheet Summary	What key messages are we trying to communicate? What do we want the judge to think when looking at this? What format should we use? How does the design affect our message? Who will design our summary? Given time and space restraints, have we discarded all non-essential information? What is our tone? How clear is our point? What do we bring to the table in the deal we funded? Is it clear how we made our decision? How did we arrive at our valuation? Do we want to include appendices, and if so, what point are we making with them?
Negotiations	What is our strategy? What is our tone? What key messages are we trying to get to the judges? How will we introduce ourselves? How hungry are we for this deal? How much do we want to sell ourselves? What key points are deal breakers? Which points should we start with? Which points should we be prepared to concede?
Q&A w/VCs	Who will answer questions? How will we divide which types of questions are answered by whom? Where will we stand? What is our strategy for fielding questions so that it looks smooth and professional? How can we avoid contradicting ourselves? What strategy can we employ to be as brief and responsive as possible? Should we admit it if we get caught in a mistake? How firm are we in our decisions?