Venturing into Venture Capital

The following is a guest post by first year NUS MBA student Nikhil Kapur, on his reflections about participation in the Venture Capital Investment Competition (VCIC) 

It all started when Mondy (aka Subhajit Mandal, financial trader from Singapore and the loudest in our team) and yours truly decided to contact the VCIC authorities individually about our interest in participating in the competition. For the uninitiated, VCIC allows Business School teams to play the role of a Venture Capitalist, analysing real startups, complete with due diligence and partner meetup rounds. The VCIC folks were slightly befuddled by two individual queries from the same school and connected us together. Hence, both of us set out to find the perfect team to enter the competition with. Long story short, we found the team in Ricky Wong (IPO specialist from Hong Kong and a really heavy (pun intended) drinker), Jose Antonio Borrero (Ecuadorian Project Financing specialist and a hardcore party person), and Pornteera Pawijit (Biotech PHD and Thai, enough said).

VCIC team-photo

(L to R): Ricky Wong, Pornteera Pawijit, Nikhil Kapur, Jose Antonio Borrero Cordova and Subhajit Mandal.

And so we lumbered through January and February, meeting each other as much as the hectic business school schedule allowed, preparing for a subject that we were all very passionate about (Venture Capital) but knew very little of. After talking to a bunch of seniors, we started to unravel the mystery clouds shrouding VCIC, and ended up finding ourselves in a meeting room in Nanyang Business School, waiting for the regional round to start.

In the regionals, we were analysing three startups: QSearch, EduMatters, and 3DPrinter. The due diligence round began with us interviewing each startup for 15 minutes. Although we liked none of the companies, we had to choose one nonetheless, and after much deliberation (involving some scuffling and tiny blue bruises), we chose QSearch, an automated marketing and analytics startup. The company was in popular demand since barring one, all the other teams had also chosen QSearch. Next up was the negotiation round where we were trying to bring down the valuation of the company to less than one-third of the founder’s valuation. Mondy and Ricky came up with a clever financial structure (not that the judges liked it so much in the end, but it gave us an edge for sure) for the term sheet and up we went against a very professional 9-times serial entrepreneur. 10 minutes into the session and I am proud to say we had the founder completely agreed to our logic of giving lower valuation and sealed the deal. We did miss a few points, which I’ll bring up in the next part.

Lastly, we entered the partner meetups with the judges. The judges in VCIC are top-notch Venture Capitalists and Angel Investors, who role play senior partners in your VC firm and judge you, among other things, based on the deal you present to them. We could answer questions thrown at us by the partners, most of them revolving around the investment opportunity, our rationale for the investment decision, and the deal structure itself. We were berated for not diving deeper into the team aspect of the company and finding the real motivations of the founders. Taking this with a pinch of salt, we sat fingers-crossed for the final decision of the judges. Delighted to say, we won (!), and also got an award of $1500.

VCIC teampic2

Post the competition, we had a networking session with some of the judges that turned out to be a great way to interact with the investor community of Singapore.

Next Stop: University of North Carolina, US, for the global finals!

4lPe72mk_reasonably_smallNikhil Kapur is a first year NUS MBA student (class of 2016). He’s an entrepreneur (www.tommyjams.com), President of NUS MBA Entrepreneurship Club, econ-wonk, dog-lover, mobile-developer, and internet-enthusiast.Stay tuned for the finale, part two, and follow the author’s blog: http://nikhilkapur.blogspot.com. Contact: nikhil.kapur@u.nus.edu.