®
VCIC 2006
Player Handbook
Prepared by Patrick Vernon
VCIC National Coordinator
July 2005
VCIC
®
VENTURE CAPITAL
INVESTMENT COMPETITION
Player Handbook
Table of Contents
Introduction.......................................... 1
About VCIC® ....................................... 2
What to Expect..................................... 3
Tips for Preparing ................................ 5
Organize Your Own Internal VCIC..... 9
Sample Fund Profiles......................... 10
Term Sheet Template......................... 11
Judging Form ..................................... 12
Logistics............................................. 15
Agenda ............................................... 16
Rules .................................................. 17
Non-Disclosure Agreement ............... 19
Hall of Champions ............................. 20
Regional Host Schools....................... 21
Regional Host Application................. 22
www.vcic.org
vcic@unc.edu
©2005 UNC Kenan-Flagler Business School
All Rights Reserved
VCIC® Player Handbook
INTRODUCTION
July 6, 2005
Dear VCIC Contestant:
Let me start by saying, if you’re reading this on the airplane en route to compete at VCIC, then
I’m really sorry. It’s too late. Go ahead and put this back in your paid-for-by-some-corporatesponsor backpack and read the Journal, ‘cos I can’t help you now. If you’ve got a month or so to
go, then I envy you! You are about to embark on probably the most rewarding journey of your
MBA career. I know it was for me, though to be honest, I was one of those guys in the first
sentence.
I put this Handbook together because I respect the time commitment you have made to
participate in VCIC, and I want to make sure that every minute you spend preparing is
productive. Let me promise you this: you will immensely enjoy the 48 hours you spend at VCIC.
There is nothing like it. No other experience at business school has the diversity of challenging
activities and the depth of exposure to very smart, creative and successful people. You’ll learn
more than you thought you could in 48 hours.
I will make you one other promise: every minute you spend preparing will be worth it. Take
advantage of VCIC as your excuse to reach out to alumni, classmates and potential mentors to
further your own professional network.
And come to win. Winning is good. We’ll have a check for you and everything.
See you there,
Patrick Vernon
VCIC National Coordinator
Center for Entrepreneurial Studies
UNC Kenan-Flagler Business School
®
VCIC is an entrepreneurial education experience created by UNC Kenan-Flagler Business School.
©2005 All Rights Reserved
1
VCIC® Player Handbook
ABOUT VCIC®
VCIC® is NOT a business plan competition! It is a competition in which student teams play the
role of hypothetical venture capital firms charged with evaluating investment opportunities and
deciding where to place their money. Also participating are real entrepreneurs seeking funding
(the investment opportunities) and a panel of real venture capitalists who act as judges. Teams
read business plans, meet entrepreneurs, conduct an abbreviated due diligence and summarize all
of their analysis in an investment strategy that they pitch to the panel of VC judges. Students use
quantitative skills to evaluate business plans – accounting, finance, operations, marketing,
organizational behavior, strategy, etc. Qualitative skills are tested during presentations and Q&A
sessions – from building a rapport with entrepreneurs to confidently presenting (and defending!)
strategies to VC professionals. Lastly, teamwork and strategy are essential to handle the
workload.
What do past participants say?
98% - highly recommend
92% - VCIC is a lot of fun
74% - best educational experience
of b-school
BRIEF HISTORY
In 1998 the technology boom was well under way, and business plan competitions were popping
up at almost every business school. UNC’s Kenan-Flagler Business School was looking for a
new twist on the old idea. What if students play the role of investors rather than entrepreneurs?
What if real entrepreneurs who are pitching to real VCs pitch to students instead? Students could
have the opportunity to evaluate numerous real business plans and share in the dreams of real
entrepreneurs from the perspective of potential investors – what a great education for future
entrepreneurs and future venture capitalists alike!
Thus was the genesis of VCIC®. UNC, Duke, Virginia and Wake Forest participated in this new
experiment in 1998, and it worked. Within two years, VCIC went national, with four regional
competitions and 27 schools. By 2002, all of the nation’s top business schools were regularly
signing up, with many more knocking at the door. By 2005, two new wild card rounds had been
added, bringing the number of schools participating to 42. VCIC is the only competition to
include teams from all top 20 business schools.
®
VCIC is an entrepreneurial education experience created by UNC Kenan-Flagler Business School.
©2005 All Rights Reserved
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VCIC® Player Handbook
WHAT TO EXPECT
This section explains the process of a 48-hour VCIC event. Wild card and internal events are
very similar, but are condensed into one day (see Special Notes below).
THURSDAY EVENING / FRIDAY MORNING
Upon arrival, all teams receive the same “fund profile” that will spell out your fund’s size, age,
focus, etc. After signing the rules and a non-disclosure agreement, you receive two copies of
each business plan. Most teams return to their hotel rooms (with wireless internet) to read and
research the plans. You are due back on campus for entrepreneur pitches at 1:00 p.m. Friday,
which gives you less than 18 hours to do a month’s worth of due diligence. It is imperative that
your team has a strategy for handling this workload. During this time your team needs to:
• Read business plans
• Thoroughly research all plans (do not dismiss a plan yet!)
• Fully prepare for due diligence sessions, including a list of questions and strategy for
each entrepreneur
FRIDAY AFTERNOON
At 1:00 p.m. sharp, entrepreneurs begin pitching. No questions are allowed during the
presentations. Slides are not distributed, so it is important to take good notes. Directly after
watching the presentations, each team will have an individual 15-minute Q&A session with each
entrepreneur. This session is your chance to get any information you need directly from the
entrepreneur to make your decision. It is also the first opportunity judges will have to watch you
perform, and each judge will only get to score your performance with one entrepreneur (they can
only be in one place at a time). Hence, your team needs to be on its game for all Q&A sessions.
Think of these deals as having been referred to you by a respected colleague or a limited partner.
Even if you know you cannot fund the deal, you will have to explain your decision thoughtfully.
Friday afternoon is a test of skill, preparation, strategy and endurance. It is also the soul of
VCIC, wherein you get to share in the dreams and match wits with gifted entrepreneurs. As you
will learn, venture capital investing is a people game, and you will be surrounded by very
talented people. Friday afternoon is grueling, but it is fun.
FRIDAY NIGHT
Dinner is provided nearby (all meals during the competition are provided). Teams then have until
10:00 a.m. Saturday morning to turn in their first deliverables: a one-page executive summary
and one term sheet summary for each deal you choose. You have fewer than 16 hours to finish
any relevant research, select your investment(s), choose all the terms in the deal(s), write your
exec summ and begin work on your PowerPoint presentation. Oh yeah, and sleep. Sleep is nontrivial. You’ve got a big day tomorrow.
®
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©2005 All Rights Reserved
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VCIC® Player Handbook
TIP: bring your own templates for the executive summary and PowerPoint presentation so that
you do not have to start from scratch at the event.
SATURDAY MORNING
After you turn in your 10:00 deliverables, you have only two hours to finish your PowerPoint
presentation. Do not simply repeat your executive summary; judges have already read that (you
never want to bore VCs!). Make sure you add value to what the judges have already seen.
Behind the scenes, judges will be working diligently reading your written deliverables and
preparing questions for you.
SATURDAY AFTERNOON
At noon, your PowerPoint presentations are due. No changes may be made after noon. All teams
must have a representative present for the random drawing that determines the order in which
teams present. After the drawing, teams may trade with each other for time slots. The first time
slot is 1:00, the last, 3:20. The benefit of going early is that you get to stay and watch the teams
after you. The benefit of going later is that you’ll have more time to practice your pitch, though
you may be presenting to a packed house.
Upon finishing, teams are welcome to stay and watch the rest of the teams (either in the same
room or by video simulcast nearby). You will receive a package that includes:
• Summary of judges’ opinions
• Spreadsheet of all teams’ investments
• One copy of all other teams’ deliverables
• List of all questions asked by each team during the due diligence sessions.
That’s it – you survived! Now you just have to wait for the judges to make their decisions.
After the awards ceremony you will have the opportunity to meet with and receive feedback
from at least one of the judges.
SPECIAL NOTES FOR WILD CARD AND ONE-DAY EVENTS
The process for one-day events is the same with a few notable differences:
• There are only two entrepreneurs instead of five.
• You receive business plans via email before arriving.
• You must invest in exactly one company.
• Optional templates are supplied for all deliverables due to the limited time frame.
• You have less than three hours to make decisions and turn in deliverables.
®
VCIC is an entrepreneurial education experience created by UNC Kenan-Flagler Business School.
©2005 All Rights Reserved
4
VCIC® Player Handbook
TIPS FOR PREPARING
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 three national 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
2. Form a diverse team
3. Recruit VC coaches
4. Create a game plan
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
®
VCIC is an entrepreneurial education experience created by UNC Kenan-Flagler Business School.
©2005 All Rights Reserved
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VCIC® Player Handbook
•
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.
®
VCIC is an entrepreneurial education experience created by UNC Kenan-Flagler Business School.
©2005 All Rights Reserved
6
VCIC® Player Handbook
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
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? Will we bring a template or design one from scratch at the event?
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(s) we funded? How
did we arrive at our valuation?
®
VCIC is an entrepreneurial education experience created by UNC Kenan-Flagler Business School.
©2005 All Rights Reserved
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VCIC® Player Handbook
Term sheet
summary
What stance in negotiations are we taking with this term sheet? What is our tone? How many
exhibits should we include?
Pitch to VCs
What is the design of our slides? What tone are we going for in design? What are our key
messages? What value-add is our presentation to our exec summ? How similar are the two?
Who will present? Where will we physically stand as we present? How will we transition
speakers? What can we say in 6 minutes? What gets cut? What is the ideal # of slides? How
many extra slides should we prepare? How rushed should we be? How much should we
practice? How will we introduce ourselves? What is our relationship with judges? What is our
tone? What is more important, demeanor or content? Who will control slide transitions?
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?
®
VCIC is an entrepreneurial education experience created by UNC Kenan-Flagler Business School.
©2005 All Rights Reserved
8
VCIC® Player Handbook
ORGANIZE YOUR OWN INTERNAL VCIC
As I say many times in this manual, the best way by far to prepare for VCIC is to hold an internal
event at your school. Even if you have just one entrepreneur come to pitch to two teams with two
coaches watching, going through this process will be surprisingly rewarding. Further, using an
“event” as the vehicle for your training gives you and your program a marketing opportunity.
This is all easier said than done, I know. Below are some points to consider intended to help you
realistically gauge whether or not organizing an internal event makes sense for your situation.
CHALLENGES TO CONSIDER
• Raising money – there is no cost associated with organizing an internal VCIC unless you
choose to provide catering or prize money
• Getting approvals as necessary from student organization or advisor
• Choosing a date with as few conflicts as possible in late fall or early winter
• Reserving classroom(s) and study rooms(s)
• Recruiting teams, entrepreneurs and judges
RUNNING THE EVENT
If you have more than three teams, you probably cannot run the event and be on a team at the
same time. To join the team that advances, you have several options:
1. Hold the event for 4-member teams
2. Have each 5-member team pre-identify one alternate who will not travel to next event
3. Set up the competition so that it is not the winning team that goes forward, but
individuals from all teams chosen by judges to represent the school
EVENT FORMAT
You have several options for format, from a “Practice
VCIC” for two teams, to a two-day event that can
accommodate up to 50 students.
VCIC
Format
Duration
# of Teams
& Judges
# Entrepreneurs
Practice
6:00-9:00 p.m.
2
1
Evening
5:00 – 10:00 p.m.
4
1
One-Day
9:00 – 5:00
6
2
Two-Day
1:00-5:00 Friday
9:00-5:00 Saturday
8
4
If you do decide to host an event, I have all the
materials you will need, including a manual and all
the electronic files. I am happy to talk with you about
your specific situation. Email me, Patrick Vernon, at
vcic@unc.edu or call (919) 962-9257.
®
Files Supplied by HQ
Organizers
Handouts
Entrepreneur Instructions
Contents – Entrepreneur Folder
Entrepreneur Profiles
Contents – Judge Binder
Entrepreneur Voting Form
Contents – Team Folder
Fund Profile
Email to Judges
Judge Bios
Judging Process
Judge Instructions
Name Tag Samples
Judge Table Tents
Organizer Checklist
Judge Voting Form
PPT - Awards Ceremony.ppt
Judges’ Opinions
PPT - Sponsor-Judge Pitch.ppt
Judging Forms
PPT - Team Orientation.ppt
Name Tags
PPT - Timer 6.ppt
NDA (non-disclosure)
PPT - Timer 9.ppt
Previous Champions
PPT - Timer 15.ppt
Previous Judges
PPT - Welcome Kick-off.ppt
Previous Ventures
Press Release – Event
Schedule – Due Diligence
Press Release – Winners
Schedule – Teams
Schedule – Master and Rooms
Sponsors – National
Schedule – Team Presentations
Sponsors – Regional
Schedule – Volunteers
Team List
Signs – Directions
Team Logistics
Signs – Rooms Reserved
Team Payment Info
Signs – Timer Warnings
Team Photos
Sponsor Commitment Form
Team Questions
Sponsor Op Regional
Team Rules
Survey – Students
Team Table Tent
XLS - Entrepreneurs Choice Tally
Team VentureXpert
XLS - Judges Voting Tally
Term Sheet Template
XLS - Participant Database
XLS - Sample Regional Budget
XLS - Teams Investment Summary
VCIC is an entrepreneurial education experience created by UNC Kenan-Flagler Business School.
©2005 All Rights Reserved
9
VCIC® Player Handbook
SAMPLE FUND PROFILES
All teams at a VCIC event will receive the same fund profile. You will not know the specific
profile until the event. Below are examples; the profile at your event will be different.
Size
Term
$150MM
Formed in early 2004 with a 10-year term
This is the second fund that your management team
Other funds
has raised.
You may assume any number of partners and
Investment professionals associates, including your team members and/or some
of the judges.
% of fund committed
15%
Stage focus
Seed, first, and second round
You may choose any geographical location(s) for
Location
your office(s)
Intensity focus
80% active, 20% passive
Size
Term
Other funds
Investment professionals
In-house expertise
% of fund committed
Industry focus
Stage focus
Location
Geographic focus
Intensity focus
®
$60MM
Formed in early 2003 with a 10-year term
This is the first fund that your management team has
raised.
Two partners and three associates, including the
members on your VCIC team
Assume that all members have significant VC
experience
35%
Assume that you have expertise in any industry
Seed and first rounds
A location with significant VC opportunity, but not
specifically Silicon Valley or Route 128
Assume all deals in the competition are within
reasonable travel time from your office
60% active, 40% passive
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©2005 All Rights Reserved
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VCIC® Player Handbook
TERM SHEET TEMPLATE
Fill out one of these for each investment. Four pages of attachments are allowed.
Download this file from the VCIC website.
ENTER TEAM NAME HERE
investing in
ENTER COMPANY HERE
Pre-Money Valuation:
$x,xxx,xxx
Team’s Investment:
Syndicate Investment:
Total Series “VCIC”:
$x,xxx,xxx
$x,xxx,xxx
$x,xxx,xxx
Post-Money Valuation:
$x,xxx,xxx
% Ownership by Team
xx%
Option Pool
Board Structure
Closing Conditions
Liquidation Preference
Dividends
Anti-Dilution
Expiration Date
Other Key Terms
NOTE: You must add or delete terms as appropriate for your deal. Do not assume that because a term is
included or missing that it is or isn’t important to your deal.
®
VCIC is an entrepreneurial education experience created by UNC Kenan-Flagler Business School.
©2005 All Rights Reserved
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VCIC® Player Handbook
JUDGING FORM
This is the form judges will use during the competition.
VC Industry
Risk
Knowledge
Identification
30%
& Mitigation
45%
Teamwork
Communications
15%
10%
TEAM NAME
TEAM RANK
(out of 8 teams)
This form will be given to the team.
Please take notes that will give both positive and negative feedback.
Questions are in order of priority (top questions count more)
Due Diligence
poor
1
summary score for this section→
1.5
average
2
2.5
3
3.5
excellent
4
4.5
5
Overall, how effective and professional did you feel the team was in this session?
1
2
3
4
5
How well did the team cover what you consider the key questions?
1
2
3
4
5
How skilled was the team at getting information (not just asking a list of questions)?
1
2
3
4
5
How well did the team demonstrate its understanding of this opportunity?
1
2
3
4
5
To what level was the team able to establish positive rapport with the entrepreneur?
1
2
3
4
5
How familiar and appropriate was the team with VC vocabulary and jargon?
1
2
3
4
5
How well did the group appear to work together as a team (as best you can tell)?
1
2
3
4
5
Best part: (of team’s performance)
circle numbers to indicate
score
Worst part:
Particularly good question the team asked:
Particularly important question or information the team missed:
QUESTIONS FOR TEAM (Start a list of questions that you’d like to ask the team in Q&A.)
®
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©2005 All Rights Reserved
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VCIC® Player Handbook
Judging Form (cont’d)
Questions are in order of priority (top questions count more)
Executive Summary
poor
1
average
1.5
2
2.5
3
3.5
excellent
4
4.5
5
How well did the team’s overall investment strategy align with judges’ opinions?
1
2
3
4
5
How well did the team identify key issues and risks in each company?
1
2
3
4
5
How well did the team identify and value critical milestones?
1
2
3
4
5
How expertly did the team seem to understand the opportunities?
1
2
3
4
5
How well did the team’s investment decisions align with fund profile?
1
2
3
4
5
How effectively does the document communicate the reasoning behind decisions?
1
2
3
4
5
Best part:
Worst part:
Judges: please also take notes on printed Executive Summary to give to team.
Term Sheet(s) (summarize multiple term sheets)
1
1.5
2
2.5
3
3.5
4
4.5
5
Overall, how appropriate and professional do you feel the term sheet was?
1
2
3
4
5
How realistic were valuations?
1
2
3
4
5
How well did the term sheet align with judges’ opinions?
1
2
3
4
5
How closely do team’s terms align with the current VC practices?
1
2
3
4
5
How appropriately did the term sheet address key risks?
1
2
3
4
5
How well did the terms align with the fund profile?
1
2
3
4
5
How acceptable would term sheet be to the entrepreneur and other investors?
1
2
3
4
5
Best part:
Worst part:
Judges: please also take notes on printed Term Sheet to give to team.
®
VCIC is an entrepreneurial education experience created by UNC Kenan-Flagler Business School.
©2005 All Rights Reserved
13
VCIC® Player Handbook
Judging Form (cont’d)
Questions are in order of priority (top questions count more)
Team Presentation and Q&A (6-minute presentation, 9-minute Q&A)
poor
1
average
1.5
2
2.5
3
3.5
excellent
4
4.5
5
Overall, how effective and professional was the team in this session?
1
2
3
4
5
Was the team able to answer all questions confidently and appropriately?
1
2
3
4
5
Did the team avoid major blunders in both the presentation and the Q&A?
1
2
3
4
5
How compelling (confident, energetic, convincing) was the presentation?
1
2
3
4
5
How well did the team justify its decisions?
1
2
3
4
5
How familiar and appropriate was the team with VC vocabulary and jargon?
1
2
3
4
5
To what extent were answers articulate and to the point?
1
2
3
4
5
How well did the team work as a group?
1
2
3
4
5
Best part:
Worst part:
Other notes or general comments for feedback to team:
®
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VCIC® Player Handbook
LOGISTICS
COMPUTER
• Bring your laptop and wireless card.
• Bring network cable just in case.
• Optional – portable printer for your hotel room.
TRAVEL AND HOTEL
• Teams are responsible for all travel and accommodation expenses.
• Arrive by 4:00 p.m. Thursday and depart Sunday.
(Wild Card: arrive Thursday evening and depart Saturday.)
• Please do not plan on departing the evening of the competition except in case of emergency.
• Host school will have a block of discounted hotel rooms available. Be sure to book early.
• Book at least two rooms – most teams do a lot of work in their rooms.
• Every effort will be made to find hotels with wireless connectivity.
DRESS CODE
• Business casual suggested.
• Keep in mind you’re pretending to be a VC, not a banker.
FOOD AND WATER
• VCIC covers all meals during the competition (it ain’t great, but we keep you fed).
• It is always a good idea to travel with a water bottle to keep hydrated.
• Saturday dinner is usually not covered by VCIC.
ENTREPRENEURS
• You will not know who the entrepreneurs are going to be until you receive the business plans
at the event.
• If you discover that you already know one of the entrepreneurs at VCIC:
o You must report this immediately to the event coordinator at the kick-off meeting.
o You may be asked to describe any inside information you have to all teams.
o All teams can then vote on whether to include the entrepreneur in the competition.
JUDGES
• During the competition, please avoid any familiarities with judges even if you are
acquainted.
®
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VCIC® Player Handbook
AGENDA
Regional Event At-a-Glance
THURSDAY
Arrive by 4:00 p.m.
6:00
Welcome
7:00
Business plans distributed
FRIDAY
1:00 p.m. Entrepreneur presentations
2:45
Due diligence sessions, 15-minutes each
SATURDAY
10:00 a.m. Executive summary and term sheets due
Noon
Presentations due by email
Random drawing for presentation order
1:00 p.m. Team presentations and Q&A (6 minutes, 9 minutes)
3:45
All teams wrap-up meeting
4:30
Awards ceremony and feedback sessions
7:00
Networking event
SUNDAY
Depart any time
Wild Card Event at-A-Glance
WEDNESDAY
5:00 pm. Business plans are emailed to students
THURSDAY
Arrive during evening, check into hotel
FRIDAY
8:00 a.m. Team orientation meeting
9:00
Entrepreneur pitches
9:45
Due diligence
1:00 p.m. Deliverables begin
3:00
Team presentations and Q&A
5:00
Awards ceremony
SATURDAY
Depart any time
®
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VCIC® Player Handbook
RULES
Student Eligibility: All graduate students, not just MBA candidates, are eligible, including
executive MBA, excluding students who are current full– or half–time paid employees of a
venture capital firm. ***New Rule for VCIC 2006: no student may participate in a VCIC
regional competition two years in a row.***
Team Size: Except in cases of emergency (to be determined by the VCIC Organizational Team),
teams must have five members. Substitutes in future rounds are allowed. Teams may not bring a
student alternate or observer to the event.
Advisors: Teams are encouraged to bring faculty or staff advisors. Advisors cannot assist the
team during the competition and should avoid communicating with the team until after the
competition. Advisors will have access to judging sessions and can give valuable feedback after
the event. Student advisors are prohibited.
Outside Contact: Students may not consult or contact any individual outside of their team for
advice or research purposes once the competition begins. For research, teams are allowed to use
only publicly available resources on the Internet, and are prohibited from using proprietary
databases unless provided to all teams by VCIC. A proprietary resource is defined as one that
requires a paid subscription for use, including those paid for by your university.
Prize Money: Checks are generally mailed 6–8 weeks after the event to individuals designated
by winning teams. Income taxes may be withheld depending on policies of the host university.
National finals: 1st–$10,000, 2nd–$5,000, 3rd–$2,000, Entrepreneurs’ Choice–$1,000. Regions:
1st–$3,000, 2nd–$2,000, EC–$1,000. Wild cards: 1st–$1,250, 2nd–$750, EC–$500.
School Anonymity: Teams may not indicate their school affiliation to the judges during the
competition, including but not limited to emblems on clothing, computer bags, etc. Teams should
also avoid communicating with their advisors in the presence of judges.
Dress code: Business casual.
Non–Disclosure of Business Plans: At a regional competition, each team will receive two hardcopies of each business plan. It is forbidden to copy any portion of any business plan. At wild
card events, teams receive businss plans by e-mail prior to arrival and may print one copy per
member. Participants are required to sign non–disclosure agreements. All copies of business
plans will be collected and destroyed at the end of the event.
Inside Information: Upon receiving business plans, any student with prior information about an
entrepreneur must inform the event coordinator at the kick-off meeting. Failing to do so could
result in forfeit. All teams can then vote whether or not to include the entrepreneur.
Entrepreneur Presentations: No questions are allowed during presentations. Slides are not
distributed.
®
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VCIC® Player Handbook
Due Diligence Sessions: There are no restrictions on what teams may ask of entrepreneurs
during the Q&A sessions. However, no contact is allowed between teams and entrepreneurs at
any other time during the competition. Teams may quickly introduce themselves upon entering
the room before the timer starts. When the timer expires, the session must immediately end, even
if in mid–sentence, and the team should quickly thank the entrepreneur and leave the room.
Executive Summary: Each team’s executive summary must be no longer than one side of one
page to cover all opportunities. Teams may bring their own template to the event.
Term Sheet Summary: Each team must submit a one–page term sheet summary for each
investment it chooses to make, with up to four optional pages of attachments for each summary.
Teams are strongly encouraged to use the supplied template.
Team Presentations: Teams will have six minutes (four minutes at wild card events) to present
their investment strategies to judges. Teams will be cut off if they have not finished when the
timer expires. At the end of the presentation, a new timer for Q&A will begin. Teams may bring
their own template to the event.
Local Teams: Local teams are expected to operate under the same facility restrictions as all
other teams. Teams may not take advantage of libraries, computer facilities or other assets that
could potentially provide an unfair advantage over visiting teams.
Publicity: All participants agree to allow the host to use their likenesses for the purpose of
promoting the event in the future.
Honor Code: It shall be the responsibility of each student to obey and support the enforcement
of these rules. All team members must sign a copy of these rules at the kick–off meeting
indicating their agreement to be bound by these rules.
Dispute Resolution: All decisions by judges and the VCIC Organizational Team are final. For
complaints, questions, concerns or to report possible rules violations, contact the regional VCIC
coordinator. These rules may be revised at any time if the purpose of the revision is made in the
interest of fairness for all competitors. Revisions will be communicated to all participants as
quickly and fairly as possible.
®
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©2005 All Rights Reserved
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VCIC® Player Handbook
NON-DISCLOSURE AGREEMENT
All participants will be asked to sign this document at the event to protect our entrepreneurs.
This agreement is made between VCIC® spectators (collectively, the “Designee”), the host school and all
companies participating in VCIC® (collectively, the “Company”). Company and Designee have entered
into a relationship that requires the disclosure to Designee of certain confidential business and trade
information proprietary to Company. In consideration of the mutual business covenants between the
parties and other good consideration, the parties agree as follows:
1. INFORMATION DISCLOSED. Designee requests disclosure of confidential information which will
be delivered upon signing of this agreement and a receipt for the disclosed information as follows:
a. Business plan, strategy, business financings and related information.
b. USE OF INFORMATION. Designee agrees to hold the disclosed confidential proprietary
information for internal use only in the furtherance of the mutual business enterprise
which is further described as follows:
2. The confidential information may only be used in connection with VCIC®.
3. NON-DISCLOSURE. Designee agrees not to disclose Company confidential information to any third
parties or to any of its employees except those employees who are required to have the confidential
information in the performance of their duties.
4. PROTECTION OF CONFIDENTIALITY. Designee agrees that it shall protect the confidentiality of
and take all reasonable steps to prevent disclosure and use of the confidential information to prevent it
from falling into the public domain or possession of unauthorized persons. Designee will advise
Company in writing of any misappropriation or misuse by any person of the confidential information.
5. RETURN OF MATERIALS. Any materials or documents of Company will be promptly returned by
Designee to Company, accompanied by all copies of such documentation, at the earliest convenience
after Company’s request for return of the materials, or the termination of the relationship between
Company and Designee.
6. PATENT OR COPYRIGHT INFRINGEMENT. Nothing in this Agreement is intended to grant any
rights under any patent or copyright of Company.
7. TIME PERIOD. Obligations of confidence under this Agreement shall continue until two [2] years
from the above date.
8. The Designee agrees that a breach of this Agreement by the Designee would result in irreparable
harm to the Company, and that upon breach, the Company shall be entitled to injunctive relief in
addition to monetary damages.
9. MISCELLANEOUS. This agreement shall be governed by, and construed in accordance with, the
laws of the state in which the VCIC® event is taking place, including all matters of construction,
validity, and performance. Venue for any action hereunder or related hereto shall be in any state or
federal court with competent jurisdiction in the state where the VCIC® event is occurring. The
Designee hereby submits and waives any objections to the jurisdiction of such courts. This
Agreement is binding upon and for the benefit of the parties, their successors and assigns, provided
that the right to confidential information may not be assigned. Failure to enforce any provision of the
Agreement shall not constitute a waiver of any term hereof.
®
VCIC is an entrepreneurial education experience created by UNC Kenan-Flagler Business School.
©2005 All Rights Reserved
19
VCIC® Player Handbook
HALL OF CHAMPIONS
2005
BERKELEY
2004
WASHINGTON
2003
NORTH CAROLINA
2nd MIT
3 Chicago
EC Texas
Chicago
Harvard
North Carolina
Wharton
2nd Wharton
3rd MIT
EC Virginia
Chicago
Cornell
Notre Dame
Texas
2nd San Diego State
3rd Harvard
EC Texas
Columbia
Duke
UCLA
Wharton
2002
MICHIGAN
2001
YALE
2000
CARNEGIE MELON
2nd North Carolina
3rd Duke
Berkeley
Carnegie Mellon
Harvard
Washington Univ.
Wisconsin
2nd Maryland
3 Washington Univ.
Michigan
North Carolina
Wharton
San Diego State
UCLA
2nd UCLA
3rd Emory
Colorado
Georgetown
Wharton
Texas
Wisconsin
rd
rd
2005 Results
®
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VCIC® Player Handbook
REGIONAL HOST SCHOOLS
Bringing a VCIC regional competition to your campus connects your school with a world-class event.
VCIC host schools are on the vanguard of entrepreneurship education and are consistently ranked as top
entrepreneurship institutions. VCIC received the 2004 Most Innovative Entrepreneurship Pedagogy
Award from the United States Association for Small Business & Entrepreneurship (USASBE). No
competition does more to teach students what it takes to finance a new venture than VCIC.
University of North Carolina
Kenan-Flagler Business School
Center for Entrepreneurial Studies
National Finals: 1998-2006
University of Southern California
Marshall School of Business
Lloyd Greif Center for Entrepreneurial Studies
West Region: 2002, 2006
University of Colorado
Leeds School of Business
Deming Center for Entrepreneurship
West Region: 2000, 2003-2005; Central: 2006
New York University
Stern School of Management
Berkley Center for Entrepreneurial Studies
Northeast Region: 2006
London Business School
Foundation for Entrepreneurial Management
European Region: 2006
Georgia Institute of Technology
Dupree College of Management
Southeast Region: 2004, 2005, 2006
Babson College
F. W. Olin Graduate School of Business
Northeast Region: 2000-2005
University of Texas
McCombs School of Business
Herb Kelleher Center for Entrepreneurship
Central Region: 2000, 2005
University of Michigan
Michigan Business School
Zell-Lurie Institute for Entrepreneurial Studies
Central Region: 2003, 2004
University of California Los Angeles
Anderson School of Management
Harold Price Center for Entrepreneurial Studies
West Region: 2001
University of Maryland
Robert H. Smith School of Business
Dingman Center for Entrepreneurship
Southeast Region: 2000, 2002
Vanderbilt University
Owen Graduate School of Management
Wild Card East: 2004-2006
Emory University
Goizueta Business School
Southeast Region: 2001
UC-Irvine
The Paul Merage School of Business
Center for Entrepreneurship and Innovation
Wild Card West: 2005, 2006
Wendy Baker, Associate Dean, Babson College
“The VCIC has really helped us grow our reputation. Hosting the Northeast Regional has allowed us to attract
venture capitalists, entrepreneurs, students from other great schools and faculty advisors all to our campus, which
is somewhat off the beaten path. But once they get here, we get to show off our facilities and our tip-notch
students and provide them with a great experience. It has really helped us to build some important relationships in
the VC community, resulting in more jobs and internships for our students.”
®
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©2005 All Rights Reserved
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VCIC® Player Handbook
REGIONAL HOST APPLICATION
There are four VCIC regions in the U.S.: Northeast, Southeast, Central and West. All four events take place in
February and March. National Finals occur in Chapel Hill in April. See below for regional host responsibilities. This
application is available online at http://www.vcic.unc.edu/vcicRegionalHostapp.cfm.
Team Leader Name
Title
Student
Faculty
Staff
Email
Organization (club, center, etc.)
Faculty/Staff Advisor (if student above)
University Name
Advisor Title
Business School Name
Advisor Email
Briefly, why do you want to host a VCIC Region?
What is unique about your program that will make it a particularly strong VCIC host school?
Please list the names and titles of students, staff and faculty who will participate on your VCIC
organizational team.
VCIC National Headquarters will provide:
• An experienced coordinator on-site for the event
• Digital templates for all correspondences, schedules
and other materials distributed during the competition
• List of schools and contacts to be invited to event
• Banners, signs, oversized checks and plaques for
winners
• Gifts for judges and entrepreneurs
®
Regional Hosts are responsible for:
• Reserving adequate on-campus facilities
• Recruiting ten VC judges and five entrepreneurs
• Recruiting sponsors to fund the entire event
(approximately $10,000), including:
o Prize money – $6,000
o All catering – estimated $3,000+
• Optional – Travel and accommodations for judges
and/or entrepreneurs
VCIC is an entrepreneurial education experience created by UNC Kenan-Flagler Business School.
©2005 All Rights Reserved
22