player handbookwhat if real entrepreneurs who are pitching to real vcs pitch to students instead?...

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 [email protected]

©2005 UNC Kenan-Flagler Business School All Rights Reserved

VCIC® Player Handbook

VCIC® is an entrepreneurial education experience created by UNC Kenan-Flagler Business School.

©2005 All Rights Reserved

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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-corporate-sponsor 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




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What do past participants say? 98% - highly recommend 92% - VCIC is a lot of fun

74% - best educational experience of b-school

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.

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.




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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 non-trivial. You’ve got a big day tomorrow.




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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.




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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




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• 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.




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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?




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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?




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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

# Entre-preneurs

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 [email protected] or call (919) 962-9257.

Files Supplied by HQ Handouts Entrepreneur Instructions Entrepreneur Profiles Entrepreneur Voting Form Fund Profile Judge Bios Judge Instructions Judge Table Tents Judge Voting Form Judges’ Opinions Judging Forms Name Tags NDA (non-disclosure) Previous Champions Previous Judges Previous Ventures Schedule – Due Diligence Schedule – Teams Sponsors – National Sponsors – Regional Team List Team Logistics Team Payment Info Team Photos Team Questions Team Rules Team Table Tent Team VentureXpert Term Sheet Template

Organizers Contents – Entrepreneur Folder Contents – Judge Binder Contents – Team Folder Email to Judges Judging Process Name Tag Samples Organizer Checklist PPT - Awards Ceremony.ppt PPT - Sponsor-Judge Pitch.ppt PPT - Team Orientation.ppt PPT - Timer 6.ppt PPT - Timer 9.ppt PPT - Timer 15.ppt PPT - Welcome Kick-off.ppt Press Release – Event Press Release – Winners Schedule – Master and Rooms Schedule – Team Presentations Schedule – Volunteers Signs – Directions Signs – Rooms Reserved Signs – Timer Warnings Sponsor Commitment Form Sponsor Op Regional Survey – Students XLS - Entrepreneurs Choice Tally XLS - Judges Voting Tally XLS - Participant Database XLS - Sample Regional Budget XLS - Teams Investment Summary




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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 $150MM Term Formed in early 2004 with a 10-year term

Other funds This is the second fund that your management team has raised.

Investment professionals You may assume any number of partners and associates, including your team members and/or some of the judges.

% of fund committed 15% Stage focus Seed, first, and second round

Location You may choose any geographical location(s) for your office(s)

Intensity focus 80% active, 20% passive

Size $60MM Term Formed in early 2003 with a 10-year term

Other funds This is the first fund that your management team has raised.

Investment professionals Two partners and three associates, including the members on your VCIC team

In-house expertise Assume that all members have significant VC experience

% of fund committed 35% Industry focus Assume that you have expertise in any industry

Stage focus Seed and first rounds Location A location with significant VC opportunity, but not

specifically Silicon Valley or Route 128

Geographic focus Assume all deals in the competition are within reasonable travel time from your office

Intensity focus 60% active, 40% passive




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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: $x,xxx,xxx Syndicate Investment: $x,xxx,xxx Total Series “VCIC”: $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.




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Communica-tions

15%

Risk Identification & Mitigation

45%

VC Industry Knowledge

30%

Team-work

10%

JUDGING FORM This is the form judges will use during the competition.

Questions are in order of priority (top questions count more) poor average excellent

Due Diligence summary score for this section→1 1.5 2 2.5 3 3.5 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.)

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.




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Judging Form (cont’d)


Executive Summary 1 1.5 2 2.5 3 3.5 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.




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Judging Form (cont’d)


Team Presentation and Q&A (6-minute presentation, 9-minute Q&A) 1 1.5 2 2.5 3 3.5 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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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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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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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 hard-copies 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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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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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.




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HALL OF CHAMPIONS

2005 BERKELEY

2004 WASHINGTON

2003 NORTH CAROLINA

2nd MIT 3rd 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 3rd Washington Univ.

Michigan North Carolina

Wharton San Diego State

UCLA

2nd UCLA 3rd Emory Colorado

Georgetown Wharton Texas

Wisconsin

2005 Results




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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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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

player handbookwhat if real entrepreneurs who are pitching to real vcs pitch to students instead?...

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