If a student-run start-up makes it to the final of Chicago Booth’s New Venture Challenge, then the odds are that it is a “real company,” says Steve Kaplan, Neubauer Family Distinguished Service Professor of Entrepreneurship and Finance and faculty director of the Polsky Center for Entrepreneurship and Innovation, who helped launch the NVC in 1996 after interest and demand from MBA students.
A glance at the illustrious roll call of businesses that have emerged from the New Venture Challenge (NVC) shows why it was recently named a top accelerator program in the nation.
They include GrubHub, the food delivery and menu service which was founded by Matt Maloney, MS, ’00, MBA ’10, who won the NVC title in 2006. The firm went public in 2014 (NYSE: GRUB) and has a market capitalization of nearly $2.5 billion. Online payment company Braintree, which placed first in the 2007 NVC, was founded by Bryan Johnson, MBA ’07 and acquired by PayPal in 2013 for $800 million. Braintree acquired Venmo, which powers the payment processing functions for companies like Uber, Airbnb, and LivingSocial.
Run by the Polsky Center for Entrepreneurship and Innovation at Chicago Booth, the NVC now offers winners and finalists over $$778,000in cash prizes and in-kind services, as well as invaluable feedback from dedicated coaches and faculty and introductions to investors and mentors. And the participating students earn their rewards, surviving ten gruelling weeks of honing their business plans and investor pitches with professors and real-world investors.
The annual NVC program begins in the fall, when students learn about the process ahead and form teams. It is open to any current UChicago graduate students, so first and second year full-time MBA students are eligible to apply. In February, up to 100 teams submit applications, each with a summary of their business idea and its viability, which are then sent to a group of judges who whittle the field to approximately 30. These 30 teams participate in a spring quarter course, Developing a New Venture.
Professor Steve Kaplan teaches one section during the program and Ellen Rudnick, clinical professor of entrepreneurship and executive director of the Polsky Center, teaches the other. The program puts founders’ skills to the test, in developing their business plan, practicing their pitch, and getting frank feedback from multiple judging panels composed of alumni entrepreneurs, investors, and faculty members. Only 10 teams are selected, at just one week’s notice, for the final presentation to investors and judges in June.
Participants in recent NVC programmes shared their experiences on the Chicago Booth website:
“I learned how to stand up in a room of investors who’ve seen business models like ours and are going to try and poke holes in our plan… The ability to tell, convince, sell, and defend the story—that’s what I’ll always think of as my main takeaway.” – Coleene “Coco” Meers, MBA ’14, Cofounder of beauty services app PrettyQuick. PrettyQuick placed third in the 2011 NVC and was subsequently acquired by Groupon.
“Booth’s network of entrepreneurs, angel investors, and venture capitalists, along with the faculty coaches, gave us detailed feedback on a level we wouldn’t have gotten anywhere else.” – David Rabie, MBA ’15, Cofounder of Maestro (now called Tovala), maker of a healthy smart oven. Maestro won $70,000 in the 2015 NVC, raised their first $500,000 round of seed funding, participated in Y Combinator’s Winter 2016 cohort, hit their $100,000 Kickstarter goal in one day, and is working towards product delivery later this year.
“The most important early advice we got was to tell a story… Our first presentation talked a lot about technical aspects, but coaches said to make sure we talk about the problem we’re solving.” – Mike Pintar, current MBA student and team member in NETenergy, which has developed a battery that stores thermal energy and could can save building owners 30 percent on their usage. NETenergy tied for second place in the 2015 NVC, winning $40,000.
The NVC program has spun out three additional tracks: the John Edwardson, ’72, Social New Venture Challenge (SNVC) that focuses on start-ups with a social mission; the Global New Venture Challenge (GNVC) for executive MBA students in the US, European, and Asia programs; and the College New Venture Challenge (CNVC) for University of Chicago undergraduates. As the NVC hits its 20th birthday, the entire campus will celebrate this milestone as part of UChicago Innovation Fest.
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