Things to Consider about the Judging Process at VCIC
Some students have expressed frustration at the qualitative nature of the judging. Be ready for it. This is not a numbers game. It is a people game that includes some numbers. The numbers have to work, like the plumbing has to work. There is no quantitative way to determine a best team just as there is no specific formula to determine the “best VC” (except financial returns, and we won’t have time to wait for returns at VCIC). There are many successful VCs with wildly varying philosophies and approaches, and your judging panel will likely reflect some of those differences. In other words, different judges may be looking for different things even though they have the same “criteria” in front of them.
There is a lot of room for interpretation in the criteria above, and different individuals, firms and geographical regions will have different cultures and opinions about how to be the “best VC.” It is worth looking at your specific event website to see who is judging the event to get an idea what they might be looking for. For example, if there are a lot of corporate VC judges at your event, you can expect that they may interpret the criteria differently than seed investors would.
Given that you cannot predict what your specific judges may be looking for within the criteria, your team’s goal should be to be the best you can be. Winning teams tend to have the basics covered and then take it to a higher level with their own personalities. I often call this, “finding your own voice.” The judges don’t want to hear your parroting your coaches or reciting something you learned in a textbook. Analyzing startups as investment opportunities is a complex endeavor. The judges want to hear that your team has its own way of doing it.
Don’t let the “points” in the criteria confuse you; the process is more qualitative than quantitative. An analogy might be the Olympics or a beauty pageant: everybody competing is very smart and talented. The judges have the difficult challenge of assessing which team would be the “best VC.” Often this means fishing for mistakes to rule out some teams.
In the hunt for mistakes, some judges may dive deeply into the term sheet to see how much the team understands the implications and intricacies of each term. This can seem frustratingly trivial, but it is one way to differentiate teams.
When it comes to the key terms, particularly the investment size and pre-money valuation, the judges want to hear that you are thinking like a VC (and not a banker or corporate finance officer). They also want your team to have its own analysis and is not just regurgitating what coaches have told you. Make sure to watch the training videos and take a look at the VC Razor Return Analysis Worksheet. But do not parrot those resources! Incorporate them into “your voice.”
Judges also care a lot about how you demonstrate value as a firm, as this is an important part of the business (especially in boom times). This creates a dilemma for young teams who don’t really have any experience or a network. How much should you game it? There is no single strategy that works best for all teams. We recommend being natural and demonstrating that you’ve thought it through, while not being too goofy on the gaming it front. For example, don’t recommend your uncle Bill Gates as a board member, but DO check LinkedIn and find someone who would be a good fit, and perhaps game it by saying that individual is an entrepreneur-in-residence with your firm.
When you receive feedback at the end of the day, you will often hear that you made some technical mistake that may seem trivial to your team. This may be because that technical mistake was the easiest thing to point out and not necessarily a more serious but complex “mistake,” such as a bad performance in due diligence caused in part by your abrasive personalities. That is difficult feedback to give. Keep in mind that it is very rare for some single reason that your team did not win (just as it is almost never a single reason people break up with one another, though they may point to one).
Related anecdote: I once had a student waiting outside my office when I showed up for work one Monday morning. He was mad and wanted to complain to me because his team had lost at the regional VCIC finals in Atlanta over the weekend. Judges told them they lost because they all wore blazers. I was not at the event and cannot say for certain, but I bet they lost because they were jerks. The kind of person who travels home and shows up at the professor’s office to complain on Monday morning is the same kind of person that treats founders poorly, I’ve observed, and hence loses at VCIC.
The way the scoring works is that each judge votes for their top 3 teams for each round: due diligence, written deliverables and the partner meeting. Teams get 3 points for every #1 vote, 2 points for every #2 vote, and 1 point for every #3 vote.