Venture Capital Investment Competition 2012
So the saying goes, ‘if you tell me I will forget; if you show me I may remember; but if you involve me I will learn.’ This has been especially true for all of the Venture Capital Investment Competition (VCIC) team throughout this year’s competition. Bringing together key professional skills and enhancing business acumen, the 2012 VCIC has been the most rewarding part of the MBA course so far. The following summary discusses some of what has become clear to the team through our involvement in and reflection on all aspects of the experience. In short, the VCIC was an excellent learning experience, and very much in-line with the ‘learning-by-doing’ philosophy of Manchester Business School. And the socialising wasn’t bad either!
Beginning as far back as October 2011, our team, ultimately winning the ‘Entrepreneurs’ Choice’ award at the European finals in Oxford, learned to quickly understand business propositions, evaluate whether they offered an investible business opportunity, if so then draft under what terms the investment should be made, and ultimately recommend how the entrepreneur should proceed.
A further key aspect of the competition was the opportunity to experience several pressurised negotiations with real-time entrepreneurs around a variety of business topics, and then receive specific feedback from both the entrepreneurs and judges at each stage of the competition. This was, perhaps, the most useful learning experience, helping to build skills that are applicable to all areas of professional life.
To touch upon our own experiences, it’s best to go first to what we would do differently. We realised at the beginning of the competition how little we knew about the Venture Capital (VC) industry and about how, where and why Venture Capitalists (VCs) invest. We were initially under the impression that the challenges we would face in the competition were more-or-less constrained to the stated competition rules. This turned out not to be the case, especially when facing interrogative questions from the competition judges – VC professionals – about why, how and how much we invested, why we invested under the terms we did, and what we saw as the next steps for the business in question. In short, anything VC-related was ‘fair game’, not just the stated scope of the competition.
The key point for anyone in the future is that the entrepreneurs and judges will not treat you like a competition participant or give you any allowance for not being a professional Venture Capitalist. They will talk to you in their dialect and challenge you on the intricate meanings of terminology, which to complicate matters could be dependent upon the terms’ contexts. In doing so the competition demands you behave, respond and altogether emulate a realVC outfit. To some extent we did, but if we were to begin again, it would be with the assumption that whilst the competition rules are to be acknowledged, our preparation and decisions would not necessarily be constrained or directed by them.
Where the team did excel is how we worked together. I was continually impressed by the work-ethic, resourcefulness and professional attitude that was displayed throughout the six months of the VCIC. As both the competition and our contextual understanding progressed, a pleasing aspect of the team dynamic was the continual and open feedback – self-regulation you could call it – on everything associated with our preparation.
This fostered an approach to everything we did that was mature, established by consensus and involving all team members. I think this was the foundation upon which we impressed the judges at the finals in Oxford University’s Said Business School, as it particularly enabled us to work and appear as united as we were, conduct ourselves inter-personally to a level that belied the short time we had actually worked together, and clearly engaged with the entrepreneurs in an assertive yet diplomatic manner.
A key point for anyone in the future is that the entrepreneurs will judge you primarily based on whether they would want to work with you on their idea that could potentially change their lives, if not so much more. How you interact as a team, and how you conduct yourselves socially and professionally thus matters greatly. I suppose the element to remember for the VCIC is to choose your team members wisely; the team’s character will count for as much, if not more than it does in wider professional life. And I think it’s fair to say that you can learn about technical skills and develop an understanding far more readily than you can learn to be charismatic or genuine, or even likable, all of which are essential to do well in the VCIC.
This is not to say, however, that to progress, you can rely on a glossy exterior. You can’t. The more granular aspects of the VC industry, what is currently ‘fashionable’ in VC, and the complex environment in which entrepreneurs and VCs operate must also be understood, at least to the extent of being able to withstand a cross-examination of up to ten competition judges, if not the entrepreneurs themselves. The balance, let’s say, is to maintain a diplomatic, assertive and professional demeanour with this suitability underpinned by a scientific knowledge of the relevant processes, terminology and structures, of which the VC industry has many. Not easy, but clearly not impossible.
On reflection, there perhaps isn’t a winning formula for the VCIC. There is always an element of luck involved in which business propositions need to be analysed and what style of VC the judges follow. Nevertheless, excellent team-work, comprehensive preparation and the ability to remain composed yet assertive when being questioned on reasonably complex information will always enable future MBS teams to do well in this ever-more-popular competition.