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The New Venture Challenge, which is marking its 20th anniversary, has helped turn student startups into thriving companies.
On the day of the NVC finals in May, David Rabie, ’15, and his team stood in front of a panel of judges in a Booth classroom and passed out samples of Thai chicken curry, quinoa, and ginger soy broccoli. The meals had been cooked in a futuristic countertop device — similar to a crockpot — called Maestro. Rabie’s vision of simple, healthy meals calls for customers to pop pods of raw vacuum-sealed vegetables, grains, and proteins into the machine and scan the QR-coded cooking instructions on the package. In a half hour, a well-rounded meal is ready to go.
Matt Maloney’s $2.5 billion food delivery company took shape at Booth.
The judges tossed out plenty of questions: How did Rabie plan to grow the company? Who would develop the recipes? Rabie had answers, which is why the judges awarded Maestro first place in the Edward L. Kaplan, ’71, New Venture Challenge (NVC), Booth’s signature startup program. With a cash prize of USD 70,000, business services, and enviable industry connections, Maestro has a good start in life. Four months later, the start-up is fine-tuning the product, building a team, and working toward launching a pilot model in 2016.
“Booth’s network of entrepreneurs, angel investors, and venture capitalists, along with the faculty coaches, gave us detailed feedback on a level we wouldn’t have gotten anywhere else,” Rabie said. “It was critical in helping us refine our model.”
Maestro’s win comes on the eve of the NVC’s 20th anniversary year, as student interest in startups is growing tremendously. Entrepreneurship has become the single largest concentration at Booth, surpassing finance in the 2013–14 academic year. The NVC, which is run by the Polsky Center for Entrepreneurship and Innovation, has gained broader recognition as well. In a ranking of the top 20 US accelerator programs by the Seed Accelerator Rankings Project in March — which was then published by Forbes — the NVC was named the No. 1 university accelerator program in the nation and fourth overall.
An unrivaled opportunity for students, the NVC each year offers winners and finalists invaluable feedback and introductions. Last year, the program doled out USD 600,000 in cash prizes and in-kind services such as legal and accounting.
The legacy is unmistakable. The NVC has helped provide start-up support and funding for more than 100 companies that are still in business today. NVC companies have gone on to raise more than USD 365 million in capital, create thousands of jobs, and generate nearly USD 4 billion in mergers and exits. Two of Booth’s most high-profile financial exits combined at almost USD 3.5 billion. One of them is GrubHub, founded by Matt Maloney, SM ’00, MBA ’10, who went on to win the NVC title in 2006 — a time when restaurant takeout was the province of paper menus. The Chicago-based company went public in 2014 and has a market capitalization of nearly USD 2.5 billion. The other star in the portfolio is Braintree, which placed first in the 2007 NVC. Also based in Chicago, the online-payment company founded by Bryan Johnson, ’07 (XP-76), was acquired in 2013 by PayPal for USD 800 million.
“It is extraordinary,” said Steven Neil Kaplan, Neubauer Family Distinguished Service Professor of Entrepreneurship and Finance and faculty director of the Polsky Center. “When prospective students and alumni hear those two came out of the New Venture Challenge, they’re blown away.”
Another recent exit: PrettyQuick, a beauty services app founded by Coleene “Coco” Meers, ’14, and Shreena Amin, ’12, that tied for third place in the 2011 NVC, was acquired by Groupon, another Chicago-based young company. Other NVC successes include: Base, a provider of productivity software for company sales teams; BloomNation, a community marketplace for sending fresh floral arrangements; Caremerge, a care coordination network for senior living communities; and Rise Interactive, a digital marketing agency.
The program also has spun out three additional tracks: the John Edwardson, ’72, Social New Venture Challenge (SNVC) that focuses on start-ups with a social mission; the Global New Venture Challenge (GNVC) for executive MBA students in the US, European, and Asia programs; and the College New Venture Challenge (CNVC) for University of Chicago undergraduate.
True to the deep-rooted spirit of enterprise at Booth, the idea for the NVC came from a student. Jeff Meyer, ’97, approached Kaplan in 1996 to propose a business plan competition. “I said, absolutely,” Kaplan recalled. “We pretty quickly put in place the same model we use today.”
The annual NVC program begins with the fall kickoff, when students learn about the process ahead and form teams. In February, some 75 to 100 teams submit applications, each with a summary of their business idea and its viability, which are then sent to a group of judges who narrow the field to approximately 30. These 30 teams participate in the spring quarter course, Developing a New Venture.
One section is taught by Kaplan and the other is taught by Ellen A. Rudnick, ’73, clinical professor of entrepreneurship and executive director of the Polsky Center. The teams develop their business plan, practice their pitch, and get valuable feedback — frank and often critical in every sense — from faculty coaches and classroom judges. “We throw them into the network and introduce them to people,” Kaplan said. “And we have tight deadlines, so they must produce.” Overall, about 160 judges — alumni entrepreneurs, investors, and faculty members — are involved, whether in reading applications, evaluating classroom presentations, or assessing the 10 finalists, who are selected a week before the final presentation in late May.
“If you get to the finals, the odds are that you have a real company,” Kaplan said. The NVC finals cap Innovation Week, which includes the finals of other NVC tracks as well as events and guest lectures on entrepreneurship and innovation across the University of Chicago campus.
For Waverly Deutsch, faculty coach and clinical professor of entrepreneurship, it’s all about the strength of the business story — a story that will resonate with investors. “Your job is not to tell them everything about your business,” she said. “It’s to get them excited about your business.”
“The 12-minute pitch is a coffee date,” Deutsch said. “Your goal is not to get married. Your goal is to get the dinner date, the sit-down in their office.”
That was great advice for Meers, whose PrettyQuick app enables consumers to make appointments for beauty services at spas and salons. Meers, a native of Birmingham, Alabama, spent five years at French beauty giant L’Oreal in Paris and New York. There she identified a market gap or “pain point” as she calls it and dreamed of starting her own company. She recognized that it was difficult for busy people to line up an appointment on short notice for a manicure, massage, or haircut “at the press of a button” — and that 40 percent of capacity was underutilized at one million spas and salons in the United States. So she connected spa clients eager for appointments with the still-available spa spaces and services.
“I learned how to stand up in a room of investors who’ve seen business models like ours and are going to try and poke holes in our plan,” she said of her NVC experience. “And you’re ready for it, because you’ve done so much work. You know your model inside and out. The ability to tell, convince, sell, and defend the story — that’s what I’ll always think of as my main takeaway.”
Within three years, PrettyQuick expanded to Boston, Dallas, Miami, San Francisco, and Washington, DC. Users select from hundreds of locations that have been vetted by a team of editors. Meers said new parent Groupon will provide expertise in sales and account management, while PrettyQuick’s expertise in booking and managing merchant relationships will be beneficial to Groupon. The company plans to add 5,000 spas and salons in its core cities by 2016 and to expand to dozens of new US markets.
The importance of narrative in building a business also resonated with Mike Pintar, Booth student team member of Chicago-based NETenergy that tied for second place at this year’s NVC, winning USD 40,000. NETenergy developed a battery that stores thermal energy, which it says can save building owners 30 percent on their usage and reduce carbon emissions by 50 percent.
“The most important early advice we got was to tell a story,” Pintar said. “Our first presentation talked a lot about technical aspects, but coaches said to make sure we talk about the problem we’re solving.”
