March 17, 2003


by Rob Hoyt
The Anderson Exchange



LOS ANGELES — A five-student Anderson team won second place at the Southeast regional Venture Capital Investment Competition (VCIC) held at the University of North Carolina. As one of the top two teams in the competition, Anderson advances to the national finals on April 10 to square off against the nation’s seven other top regional finalists.

Second-year Michelle Nguyen, third-year FEMBA Paul Kaseburg, and first-years Neal Hansch, Rob Hoyt, and Richard Yen competed against teams from Emory, Georgetown, Georgia, Georgia Tech, Notre Dame, Purdue, Wake Forest and Wharton. The Anderson team, battling under the given firm name of Dave Matthews Band Ventures (DMB Ventures) to maintain anonymity and avoid school bias among judges, finished second behind Wharton.

Anderson’s VCIC team greatly enjoyed competing for the school despite the two near all-nighters. “The competition was really challenging and a very realistic experience,” said Yen. “I’m looking forward to nationals next month.”

The Anderson team chose to donate the $2,000 second-place prize money to the Price Center.

The VCIC brings together teams from top business schools for a three-day competition that realistically simulates the venture capital investment cycle. Teams review business plans from real companies trying to raise venture money, interview the companies’ management teams, and make investment recommendations to a panel of judges from the venture industry. Held annually since 1998, the VCIC event has grown dramatically in popularity and awareness and represents an important venue for the school to compete in the areas of venture capital and entrepreneurship.

Upon arriving in North Carolina on Thursday night, the team received five business plans that ranged from biotech to software to fuel cell technology. Following a long night of plan evaluation, DMB Ventures met the company management teams on Friday afternoon to discuss their business strategies and competitive advantages during 15-minute Q&A sessions. These sessions were an important part of the team’s evaluation and were monitored by venture capitalist judges from the Research Triangle Park area in North Carolina.

The key to the interview process, and how teams earned points from the judges, was to identify all the major risks, as well as the true valuation, of the given deals.

“It was difficult to get all the information you’d like to and drill down into any given answer from the companies’ management within 15 minutes,” said Yen.

Based on the interview sessions, the team delivered final investment recommendations and term sheets on Saturday and defended their decisions during a 15-minute presentation to the judging panel. Judging was based on each team’s ability to assess each investment’s risks and construct a term sheet that mitigated these risks while accurately valuing the company.

Many of the deals were early stage ventures based on leveraging intellectual property out of Duke or UNC. The deal that the team eventually elected to invest in was a biotech investment that leveraged several patents from Duke medical school.

Because none of the members had any biotech investing experience, the team had to quickly learn as much as possible and make assumptions in the areas of company milestones and valuation metrics.

Next month’s national competition, also at UNC, will have eight teams composed of the top two finishers from each of the four regional competitions. All but one of the top 25 business schools competed in the various regional competitions. Anderson has competed annually in the VCIC the past four years, performing best in 2000 with a second place in nationals. Nguyen was a member of last year’s VCIC team that finished third in the regional competition.

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