The 16th Annual Edward L. Kaplan, ’71

NEWVENTURECHALLENGE

Steven N. Kaplan Faculty Director, Neubauer Family Distinguished Professor of Entrepreneurship and Finance

Ellen Rudnick Executive Director, Clinical Professor of Entrepreneurship

November 1, 2011

NVC KICKOFF

Agenda

• What is the NVC ?

• History

• How it works: Schedule / Entry Rules and Guidelines

• What goes into a Feasibility Summary?

• Why you should participate?

• Panel Discussion and Q & A

• The New Venture Challenge is one of the premier business creation competitions

• If you have a viable business model, the NVC will:

• Improve the business model substantially.

• Improve the business plan substantially.

• Increase the likelihood you will be funded.

• Provide seed funding to winners.

• Whether you start a business or not, you will learn a lot

• Brings together resources from all over the entrepreneurial community

• Sponsored by Ed Kaplan, ’71, founder, chairman, and CEO emeritus of Zebra

Technologies

Edward L. Kaplan, ’71, New Venture Challenge

• The NVC has helped launch more than 75 companies, which have raised over $235M in equity capital, including over $135M in the last year

• Companies have exited -- sold or merged -- in excess of $125M

• 1997 had 33 entries, in 2000, internet bubble year 105, last year we had 72 entries (plus 60+ entries combined to the Global NVC & Social NVC)

• Over 100 entrepreneurs, service providers, investors, per year are involved

• Cash prizes will total at least $75K in addition to free space in the ARCH New Business Incubator and free services from our sponsors

Many kinds of businesses

• Sarvega• Medspeed • Flyswat• Brightroom• Midway Pharmaceuticals• Clickshift• Bobtail• Epotec

• LiquidTalk• TixNix• Bump• BenchPrep• FutureSimpe• Quantitative Insights• Agile Diagnosis•Pretty Quick

History: 1997-2011

Team Composition

• At least one currently registered student at Chicago Booth – campus or part-

time.

• At least one University of Chicago student needs to be a founder / integral

member of the team.

• Student cannot be a consultant.

• Student cannot be a minor player.

• 10% equity.

• Size of team: no minimum or maximum.

How it works: Entry Rules and Guidelines

Originality of Business Ideas

• Generally idea should be original.

• Business plans for early stage ventures acceptable if:• a Chicago Booth or University of Chicago student is a founder; or • a University of Chicago or Chicago Booth student is in senior management

team of the venture; and• company has not already received funding from venture capitalists or

other institutional investors. Outside funding from friends, family and other individual investors up to $500,000 is acceptable.

• Business plans that have participated in the past as part of other university business plan competitions are not eligible unless approved by one of the NVC faculty or coaches.

How it works: Entry Rules and Guidelines

• The University, sponsors, and organizers of the NVC have taken all reasonable measures to assure that all contestants retain their rights to the Business Plan and Intellectual Property.

• The protection of these rights is ultimately the responsibility of each contestant.

• Contestants are urged to mark as CONFIDENTIAL any portion of their Entries, which they consider to be proprietary, or of a sensitive nature.

Protection of Intellectual Property

How it works: Entry Rules and Guidelines

• If the team wins prize money, the members will enter into an equity agreement whereby the award converts to a pro rata equity share for Chicago Booth in the new business if the company receives funding or enters into a business combination transaction.

Equity Agreements

• Timelines for submission of feasibility summaries (Feb. 6, 2012) and full business plans (April 27, 2012) are not flexible.

Deadlines

How it works: Entry Rules and Guidelines

Fall Quarter11/1/11 NVC Kickoff, followed by networking event11/19/11 NVC Gleacher Center Saturday Kickoff

Winter Quarter01/05/12 Workshop – How to Write a Feasibility Summary

Harper Center, Classroom C-25, 6-8 pm 02/06/12 Phase I feasibility summaries due at 10 am to

Harper Center, Suite 20702/23/12 Announce teams that will advance to Phase II02/27/12 Orientation Session for Phase II teams

Harper Center, Classroom C-25, 6-8 pm

Spring Quarter03/26/12 BUS 34104 Developing a New Venture course begins04/27/12 Full business plans due at 10 am to Harper Center, Suite 20705/18/12 Announce teams that will advance to Phase III Finals05/24/12 Finals at Harper Center, Classroom C-25

Important Dates

First round: Feasibility Summaries• Due February 6• Maximum of 8 pages• Notified Feb. 23

Second Round: Develop full Business Plan• In conjunction with Bus. 34104 taught by Kaplan and Rudnick• Classroom coaches Deutsch, Darragh, Rosenberg, Henikoff• First session Feb. 27; class formally begins Mar. 26• Teams present plans in class twice to entrepreneurs and VCs• Feedback is brutal but incredibly helpful • Course is a lab course, not a lecture course. Provides an environment and

resources to develop and greatly improve your business ideas.• Highly-rated class and process

Final Round: 8+ teams present to judges on May 24

NVC Timeline

Second Round: Develop Full Business Plan

• In conjunction with Bus. 34104 taught by Kaplan and Rudnick.• Classroom coaches Deutsch, Darragh, Rosenberg, Henikoff.

• First session Feb. 27; class formally begins Mar. 26.

• Teams present plans in class twice to entrepreneurs and VCs.• Feedback is brutal but incredibly helpful.

• Course is a lab course, not a lecture course. • Provides an environment and resources to develop and greatly

improve your business ideas.• You drive, we help. We do not hold your hand.

NVC Timeline

• This will be the 5th year of the Global NVC

• EXP and AXP students and alumni take online classes

• US Executive MBA students may participate in traditional NVC

• On a different timeline --- began this month

• Finals in Chicago in March

• Winner of this competition may advance to the NVC finals on May 24, 20112011 Global NVC winner Playence advanced to the NVC Finals

Global NVC

Second year for the Social New Venture Challenge

What is a Social Venture?– Sacrifice some profit for social impact – Less than 10x returns– Community development, education, orphan drugs, global health & poverty

alleviation, environmental

SNVC Kick-off/Big Problems-Big Ideas: November 9 5:00 pm Harris School– Feasibility summaries due: February 6 – Announce Phase II teams: February 23 – New Social Ventures class: begins Tuesday, March 27, 2012

Social NVC

• What is the business opportunity?– What problem is it solving?– Who is the customer?– How large is the market for this product?– Who are the other competitors or competing technologies?– How will you make money?

• What is your strategy?• Who is your team?• Why will this succeed?• Be concise. Use simple language.

• Feasibility Summary workshop on January 5th will discuss in more detail• Sample summaries on NVC website

What Goes Into a Feasibility Summary?

• NVC and course give you time to focus.• NVC and course will improve plans a great deal.• Access to judges and resources.

• Judges provide contacts / funding.• Idea will not be stolen.

• Most plans / ideas seen by many qualified eyes.• If it is easy to steal, it is not worth doing anyway.• Has never been a problem.

• You will learn a huge amount about how to evaluate and start a business.

Why Should You Participate?

• Link to sample business plans, NVC class workshops, sample equity agreement

Join online team building site where people can post ideas and team openings

www.chicagonvc.com

Key dates, deadlines, and events for the 2011-12 New Venture Challenge

Check here for the latest news on current & former NVC Companies

Find official rules and regulations, sample feasibility summaries

NVC Website

Linkd.in/NVCideas

Articles and resources

Get feedback on a new business idea

Find team members for your NVC Entry!

Share your resume & expertise to let other students find you!

NVC LinkedIn Group: Ideas Marketplace

Resources: Find an Idea

Passion • Problem • Pain Point

Websites•LinkedIn Website•Built in Chicago•Entrepreneurship

@UChicago.edu

Events•SeedCon Conference &

Fast Pitch: Nov 17, 18•Industry Meet-ups: Fall,

Winter•EVC Startup Factory

events: All Year

Technologies•Ideation Sessions•Argonne•Innovation Workshops:

Big Ideas, Big

Problems - Nov 9 Neil Kane - Nov 15

Resources: Find an Idea

Passion • Problem • Pain Point

Websites•LinkedIn Website•Built in Chicago•Entrepreneurship

@UChicago.edu

Events•SeedCon Conference &

Fast Pitch: Nov 17, 18•Industry Meet-ups: Fall,

Winter•EVC Startup Factory

events: All Year

Technologies•Ideation Sessions•Argonne•Innovation Workshops:

Big Ideas, Big

Problems - Nov 9 Neil Kane - Nov 15

Resources: Build a Team

Credibility

Capability

(Believability)

(Being Able)

Complementary Skills Your team has the skills and ability to execute

Passion for IdeaHaving a shared interest in solving a problem or creating an opportunity

Know-howYour team has a perceived expertise/intelligence in the area (e.g. advisors, Corporate Lab etc.)

Resources: Vet an Idea

Risk 1Development of a website

Risk 2Creation of warehousing capabilities

Risk 3Inventory and consignment

Risk 4Customer demand

Risk 5Operating

Risk 6Product Mix

A deal-killer risk

A path-dependent

risk

Value (+)1

2

3

4

5

6

*Gilbert, Eyring. “Beating the Odds when You Launch a New Venture

Risk

Time

Resources: Vet an Idea

*Gilbert, Eyring. “Beating the Odds when You Launch a New Venture

Risk

Time

Risk 6Product Mix

Risk 4Customer demand

Risk 1Development of a website

4

6

1

Risk 2Creation of warehousing capabilities

2

Risk 3Inventory and consignment

3

Value

*Test these key risks first

Resources: MVP Tools

3D Prototyping•Google Sketch Ups•IIT Idea Shop•Inventables

UI Sketches•Balsamiq•Ai, Ps, Id•PowerPoint•Paper/Post-its

Websites•ThemeForest.net•Wordpress•Launchrock.com

SurveyCold CallInterviewsFocus GroupA/B TestingPrototypingVideoSketchesLanding PageWebsiteAnalyticsOutsourceCrowdsource

Survey•MailChimp•Google Forms•Survey Monkey

Analytics•Ad Words•Facebook Ads•Google Web Optimizer (A/B Testing)

Outsource & Crowdsource•ODesk•Mechanical Turk•Crowdspring

Developer Shops•Doejo•Dashfire•Adalyze•Sphereinc

Tools for Testing Behavior and Preference:

And many more…

NVC Faculty and CoachesSteven N. KaplanNeubauer Family Distinguished Professor of Entrepreneurship and Finance, Faculty Director, Polsky Center for Entrepreneurship

Ellen A. RudnickClinical Professor of Entrepreneurship, Executive Director, Polsky Center for Entrepreneurship

Troy HenikoffSerial entrepreneur, cofounder and director of Excelerate Labs, cofounder of Sure Payroll

Bob RosenbergAssociate VP Public Affairs Communication, Chicago Booth Adjunct Professor

Waverly DeutschClinical Professor of Entrepreneurship

Robert H. GertnerJoel F. Gemunder Professor of Strategy and Finance

Linda DarraghClinical Professor of Entrepreneurship, Director of Entrepreneurship Programs, Polsky Center for Entrepreneurship

Social NVC Faculty and Coach

Global NVC Faculty

Kathleen FitzgeraldDirector of Academic Support, Executive MBA Programs, Adjunct Assistant Professor

People

Troy HenikoffNVC coach, serial entrepreneur, co-founder of Excelerate Labs and Sure Payroll

Nirav Batavia, Owl InvestNVC Finalist, 2011

Anu Jayaraman, Agile DiagnosisNVC 1st place winner, 2011

Coco Meers, Pretty QuickNVC 3rd place winner, 2011

Alex Pendenko, SwingbiteNVC 3rd place winner, 2011

NVC Kickoff Panelists

The 16th Annual Edward L. Kaplan, ’71

NEWVENTURECHALLENGE

Networking Session

Winter Garden