Success @ ISB: NUS wins VCIC


nus vcic isb 2010

The team (From left): Alexander Freberg, Shashwat Dhakal, Jayson Huang, Arthur Leung and Yeung Chia Li

Shashwat Dhakal shares his experience of the VCIC tournament, and the joy of victory.

It was sometime in late November, when we all were very busy with many things (an MBA norm), that the MBA office sent out the invitation from ISB to participate in the inaugural Asia VCIC competition. First of all, a quick google on VCIC competition told me that this is not the usual business case competition. Secondly, I started thinking about how to go about building a winning team. While I was thinking about the competition and the probable team, I got a mail from Chia Li offering me a place in a team that he had already made. I looked at the members in the team and I thought to myself, now this looks like a winning team! I immediately signed up and hence the journey started.

Nothing happened after we signed up for the competition. We all got very busy with all the semester end happenings of a typical business school and at the end of November, we left for the vacation. Back in school in January and we were told that the planned internal competition for the VCIC selection had been moved and so had the planned VCIC competition at ISB. A quick check of the calendars suggested to us that the competition at ISB would fall smack in the middle of the mid term break. We decided to give the VCIC competition a pass as most of us had prior commitments for the mid term break. Then suddenly there was a lifeline thrown to us! The competition at ISB was to take place a week after the mid terms. We wrote to the MBA office immediately and the MBA office along with the professors was very kind to give us a chance.

The surprise and happiness turned into misery and anxiety in a hurry as we had our first meeting about how to go about preparing for this competition. This was something completely new to NUS Business School so we had no one to go and talk to. Although we had an investment banker and a fund manager in our team, we soon figured that we would need to work extra hard to figure out the VC industry. The first couple of meetings were particularly frustrating as all of us tried to figure out a way forward. Slowly but steadily, we started to find a way with sheer hard work and perseverance, we managed to come up with an idea of a template.

After a month or so of hard work, we finally boarded the plane to Hyderabad. I am sure we had many things in mind when we boarded that plane. As for me, I was thinking about what would be a good enough showing at ISB. Given the fact that ISB had held internal rounds and that the team at ISB had already had an experience with negotiations with real entrepreneurs, I was thinking that a 2nd place should be a good achievement. We had no practice with negotiations and we had never even written a term sheet before. We had however talked to a couple of VCs and with a past VCIC winner which I believe was extremely helpful.

The airport at Hyderabad was surprisingly wonderful. We had the driver waiting for us and in the middle of the night we reached ISB. The first thing we noticed at ISB was that for a business school, it was heavily guarded!!! Finally after the security let us in, we reached Student Village 1 where we had the organising team members from ISB waiting to welcome us. We had been assigned rooms within the student apartments and I must point out that the facilities at ISB were wonderful.

Day 1

The day was spent exploring ISB and planning for how we were to go about analysing three business plans, prepare questions for the three entrepreneurs, write a term sheet for one of the business plans, negotiate with one entrepreneur and answer questions from the VCs in the end. At 5 pm that day, we were given the business plans. Soon after, we found ourselves locked into one room analysing the business plans. At around 2 am, we all concurred we needed to call it a day and so we headed for our rooms.

Day 2

Next day, we were at it again and by the day’s end, we had pretty much decided on the two business plans to pick. We had planned to concentrate on the best two and then start to think about a term sheet for one of those two. We were running a couple of hours over our planned schedule but we all knew we had no choice. All it meant was that the time allocated for sleep had suddenly shrunk by a couple of hours.

Day 3

The day of reckoning was finally here. This was the day when we got to actually meet the entrepreneurs and validate our assumptions of the business plans. After listening to the three entrepreneur pitches, we found ourselves asking questions to each one of them separately. We had 14 minutes with each entrepreneur and the VCs would judge us on how we performed in these sessions. The overall weight for these due diligence sessions was 33%. We did very well with the first entrepreneur team. The major confidence buster was with the second entrepreneur team. This was essentially the plan that was last in our preference order. Something extraordinary had to come out of this session for us to back this plan, if at all. We ended up doing very badly. In fact we were unable to fill up the entire 14 minutes we had. The only positive out of that session was that it pretty much solidified our intention of not picking that business plan to back. The third session went very well. This was the plan we had decided to back contingent upon the interview with the entrepreneur. During our interview, we pretty much reinforced our decision to back this business plan.
There was a catch though! We had thought of a valuation of 8 million for this business and the entrepreneur was expecting a valuation of 30 million. We had to pull out some trick in the term sheet to convince the entrepreneur to go with our valuation. Sure enough, we went back and within the 2 hours given to us, we pulled out a trick in the term sheet which we believed was fair to us as well as the entrepreneur.

The negotiation round started well with the entrepreneur intrigued with our valuation. This was completely expected and we had a plan to convince him. We managed to get him on our terms and suddenly 8 minutes into the 14 minutes assigned to us, the entrepreneur agreed with the term sheet. We looked at each other and wondered about how we could keep the session going for another 6 minutes. It is never a good sign when the entrepreneur agrees so early. In fact, it tells the VCs that we gave the entrepreneur too good a deal. Somehow, we managed to pull out another term from the term sheet and we kept the session going for the full 14 minutes. The Q&A session that followed was pretty uneventful as we pretty much managed to answer all the questions that were thrown at us.
After the negotiations, we could go and take a look at how the other teams were faring in their negotiations. After looking at a couple of other teams, we were pretty convinced that we wouldn’t be last (very comforting!!!). Finally, the moment of truth arrived and we were all ushered into another hall where all the entrepreneurs and VC were present. The 3rd place team was announced as IIM Bangalore. By this time we had pretty much figured out that we could be within the top 2. The 2nd place team was announced and that was not us. In fact at this point, I started to have apprehensions about our chances because the ISB team hadn’t figured in the 2nd and 3rd place. Finally, when the winning team was announced, we were pretty much stunned! All kinds of mixed emotions prevented at least myself from showing much emotion. All that hard work and perseverance had paid off and that was the best part of this win for me. The congratulations and handshakes soon followed and suddenly, we were the first ASIAN VCIC Champions!

Looking back I think that we had tremendous complimentarity within our team. We also had very good plans about how we wanted to go about the entire competition and we pretty much stuck to it. We also managed our time pretty well. Looking forward to the final round at the University of North Carolina, I think these skills will hold us in good stead. We certainly need to improve to get up to the level of the US teams that we will be pitted against. These schools have been doing the VCIC competition for the past 15 years! However, I think we will be looked as underdogs in the international round. As for me, the fact that I will be representing the NUS Business School at one of the premier competitions is very humbling. As we did at ISB, we won’t go in with very high expectations. I think we will focus very much on getting the basics right and playing to our strengths as a team. Very much like the ASIA round, I feel that if we manage to execute our plan well, we should come out with our heads held high, irrespective of the result.

Shashwat Dhakal
NUS MBA Student, Class of 2011