Booth Students Win First Place at Global Venture Capital Investment Competition (VCIC)

Chicago Booth team wins 2022 Venture Capital Investment Competition (VCIC). Left to right: Duncan McGillivary, Peter Pilone, Sophia Lammers, Yumeng (Kelly) Bu, Prakash Ramani.

A team of Chicago Booth students took first place at this year’s global Venture Capital Investment Competition (VCIC), a unique challenge that puts MBA candidates in the shoes of the investor for an immersive education on how funding decisions are made and deals are struck.

The contest took place April 8 and 9 at University of North Carolina’s Kenan-Flager Business School in Chapel Hill, which has hosted the event since its launch in 1998. It featured 13 teams from top business schools around the world, each of which had won regional competitions to land a spot in the global finals.

The Booth team’s first-place finish marks the second time the school has won the international contest — the first was in 2010 — though it has won regionals and competed in the global finals 10 times.

“The VCIC is a wonderful experiential learning opportunity for anyone interested in living in the entrepreneurial ecology,” said Scott Meadows, clinical professor of entrepreneurship at Chicago Booth and faculty advisor for the VCIC. “It helps students develop the empathy necessary to come to a mutually acceptable deal between entrepreneur and investor.

“This year’s team is in a long tradition of Booth VCIC teams that performed well at every level,” he added.

The winning team consisted of Booth students Yumeng (Kelly) Bu, Sophia Lammers, Duncan McGillivary, Peter Pilone, and Prakash Ramani. A mix of full-time, part-time, and Executive MBA candidates, the team members brought diverse skillets in operations, venture capital, engineering, and product development that they say were key to their win.

“When you combined all five of us together, we had a strength that made us succeed,” said McGillivary, a first-year MBA student who previously worked in investment banking and venture capital.

Booth students must apply to be accepted into the VCIC program, which draws those interested in pursuing careers in venture capital as well as operators and entrepreneurs seeking to understand the thinking on the other side of the table. Teams of five compete against each other in a school-wide contest, and the winning team represents Booth in the regional finals. This year, there were 73 teams competing across 13 participating regions, and each region sent their first-place finisher to the global finals.

The competition puts the student VC teams on the receiving end of a real startup’s fundraising pitch. They must evaluate the pitch, determine the company’s worth, show due diligence by asking the right questions, and develop a term sheet for investment. Finally, they must respond to a grilling by a slate of judges who are themselves professional venture capitalists.

No actual investment is made in the startups, though the participating founders walk away with good practice. Over 25% go on to raise venture capital after participating in VCIC, according to organizers.

For the students playing VC for a day, there are numerous valuable lessons, many of them applicable outside of the VC context.

“It’s like a pressure cooker for learning how to do teamwork,” said Pilone, who worked at a gaming startup before starting his MBA and hopes to work in video game venture capital. “You are given a pitch deck, you have a talk with the founder at 10 a.m., and you are handing in a term sheet by 12:30 p.m.”

The Booth team members learned to leverage their individual strengths and lucked into good chemistry, despite most being strangers before VCIC. They fed off one another during presentations, which got sharper as they moved up the ranks.

For Ramani, an Executive MBA student who works as an engineering manager at Intel, the experience was a “great confidence booster” that has emboldened him to respond when he feels put on the spot.

“I’ve been through some pretty uncomfortable moments, and it helps knowing when to talk and when to let your team discuss things,” said Ramani, who was also on last year’s winning Global New Venture Challenge team, the digital stethoscope startup HeartScreen. He participated in VCIC to grow his general knowledge base but after the win is now thinking hard about transitioning into an investing role.

The first-place VCIC prize was $10,000 and a framed certificate. Second place went to a team from Brigham Young University Marriot School of Management, and third to a team from the Haas School of Business at University of California Berkeley.

The Booth team laughs about its bumpy ride to the top. During the first round of the global finals, when the 13 finalist teams are normally pared down to six, the judges let seven teams advance to the next round, and the Booth team later learned that they were the seventh that barely squeaked by.

Given a choice to evaluate one of three startup pitches, the team had picked a local Singaporean social media company and developed “confusing and unique” term sheet and didn’t go over well with the judges, McGillivary said. It was also the first time they were competing in person, removing benefits of being virtual such as the ability to message your teammates.

Humbled by the poor performance, the team lowered its expectations, and with a calmer mindset got back on track. For the final round, they were lucky that one of the startups they could choose to evaluate was a blockchain company, as McGillivary had previously worked at a blockchain investment fund.

Despite his prior VC experience, McGillivary found VCIC extremely valuable for getting critical feedback on term sheets, which he hadn’t realized were so difficult to nail down. He was surprised to find that even the most successful venture capitalists have vastly different opinions on important deal terms.

“There is probably a right way, but a lot of it is very subjective,” McGillivary said. “It actually made me more excited about being in venture capital because there is room to do the things you want to do.”