Just two weeks ago (a Tuesday to be exact), I was in my law school class, constantly stealing glances at my computer screen to check if there were any new messages. I was anxious.

"Any news?" I typed, then clicked send.

"Nope, not yet."  Rohini replied within seconds.

Rohini and I are part of a five-person team. Earlier in the Spring Quarter, we had decided to participate in a venture capital competition sponsored by the University of Chicago Booth School of Business - the "New Venture Challenge" (NVC).

"I just got asked how we spell our company name. That might mean we're in…?" Rohini was hanging out near the Polsky Center, where the judges were finalizing their results; she too was obviously anxious.

The suspense was driving me crazy, so I turned off my laptop, and tried to keep my mind focused on my law professor. I didn't turn on my computer again, until after class. When I open my email inbox, I found a message from Ravi (another team member): "WE'RE A FINALIST!"

Business Plan Competitions

Practically every big name business school in the nation hosts some form of annual business plan competition. Hundreds (perhaps thousands) of entrepreneurially minded students from all walks and disciplines submit their ideas in hopes to get a chance to stand before venture capitalists, who may invest in their ideas and help them realize their dreams.

Some of the representative business competitions out there, by region, are:

West Coast
E-Challenge: Stanford's Business Plan Competition (see here)
UC Berkeley Business Plan Competition (see here)

East Coast
Harvard's Business Plan Contest (see here)
MIT Entrepreneurship Competition (see here)

The South
Moot Corp Competition McCombs School of Business (UT) (see here)

The Midwest
New Venture Challenge (NVC) (see here)

NVC Selection Process

There are essentially three levels in NVC: Phase I, Phase II, and Final Round.

During Phase I, hundreds of entrepreneurs from all across the nation submit a feasibility summary (basically, a brief summary describing the business concept, financials, and management) to the business school. 29 teams are selected to move onto Phase II.

During Phase II, the selected teams have the opportunity to create their business plan (a document introducing the business concept, marketing strategy, management team, and financial milestones) and practice pitching their slide decks before a panel of venture capitalists. Based on the business plan and pitch, 10 teams are selected to move onto the Final Round.

During the Final Round, selected teams submit their business plans and pitch their ideas to 30 high profile venture capitalists. One winner is chosen. The winner gets a cash prize. But the real prize is the glory that follows from winning and the invaluable investment relationships built throughout the process.

But it's probably best to think of the competition as something akin to American Idol. There is only one winner, but many participants, especially those in the Final Round, get noticed and "picked up" by some investor. In short, just because a team doesn't win, doesn't mean it won't get financed; many losing teams from the past are now extremely successful businesses.

The Beginning of NVC

My team consists of 3 MBAs and 2 JDs. It's quite an amazing bunch. Collectively the team has experience in virtually every single industry imaginable (e.g., i-banking, IT consulting, law, restaurant management, etc.)

I personally have no background in finance or economics. But long before attending law school, I was fascinated with venture capital ("VC") financing. Venture capitalists ("VCs") basically invest in ideas. An entrepreneur who approaches VCs needs to convince them that his/her business plan (a.k.a. the idea) is worth the VCs' time (~5 years) and money (millions of dollars).  The thought of being funded to realize an idea as well as investing in the next brilliant idea (not stocks, bonds or real property) is so exciting to me.

Because of that long-standing interest, naturally, during the beginning of my 2L year, I took a law school course called "Entrepreneurship in Practice" with John Rodkin. The class was basically a course on how to successfully obtain venture financing. As an experienced entrepreneur and venture capitalist, John made a point to help us experience the VC world by running through case studies. These case studies often forced us to role play and act as either the entrepreneur's lawyer or as the VC. The final exam was to conceive a business, draft a business plan, and present the business.

After my classmates and I finished presenting our businesses, John encouraged us submit our business plans to NVC. That was the beginning of my NVC journey.

What is a Business Plan?

A business plan is basically the blueprint of the business. The objective is to draft a persuasive and easy-to-read document that will convince anyone reading the plan to agree that the idea proposed in the plan is a sure winner.

But the process of drafting a good business plan is long and arduous. First, for my "Entrepreneurship in Practice" final exam, my teammate and I had to find a venture-finance worthy business proposal. Most VCs invest only in easily scalable business models that will bring huge returns in fewer than five years (e.g., Google, Facebook). After bouncing ideas back and forth, we eventually found an entrepreneur in Florida who had developed "Peelable Paint." Although I can't discuss the details due to privacy concerns, suffice it to say that my teammate and I were convinced that this cutting-edge paint would have any VC going gaga.

Now that we had an idea, we had to create our pitch deck (= PowerPoint presentation). Writing a great business plan is a lot like drafting a great legal brief: the writing has to be clear, concise, persuasive, and to the point. The process of creating a pitch deck forces people to focus and clarify their thoughts. Guy Kawasaki, a VC godfather, preaches the 10-20-30 strategy for creating a successful pitch deck:

1. No more than 10 slides;
2. No presentation more than 20 minutes; and
3. No font smaller than size 30.

My teammate and I faithfully followed Kawasaki's advice. The most difficult aspect, for me, was creating financial projections: cash trough, earnings, growth in EBITDA, etc. This is where it helped to have an MBA teammate.  

After creating the pitch deck, we finally got down to writing our business plan. We stayed up many a night - one night we worked 20 hours straight - drafting the "perfect" business plan.

To make the long story short, we received very high marks on our final exam. My teammate eventually submitted the business plan to Tuft's business plan competition, where it won a cash prize.

Tune in for Part II tomorrow! Please share your comments, reactions, and experiences.

David Yi attended Middlebury College and graduated with a degree in Political Science and Chinese. A Peace Corps volunteer in the People's Republic of China, he also acquired extensive experience teaching and training college and post-college level students in China and Korea. David then returned to the United States, where he founded oneAsia, a non-profit organization committed to encouraging unity and volunteerism among Asian nations. He soon had two jobs: running a non-profit by day and teaching the LSAT by night. David is currently a 2L at the University of Chicago Law School.