As part of our 537 Entrepreneurship class this semester, my fellow classmates and I had a very unique experience outside the classroom a few weeks ago. Organized by Professor Michael Lawless, the “Venture Vetting” (V2) competition on November 3 provided a hands-on, practical experience that allowed students to witness firsthand how material presented in class actually unfolded in a real world context.
Four students – or “entrepreneurs” – were chosen to present their “pitch deck” to a panel of three actual angel investors from the Tech Coast Angels. Each entrepreneur made a 10 minute presentation that explained his or her business model, which included revenue sources, target markets, growth expectations and consolidated pro-forma statements.
Following the 10 minute pitch deck presentations, each entrepreneur then met individually with each investor in an effort to further explore the products and their business models. The angel investors treated the USD entrepreneurs as they would any other entrepreneur making a pitch deck. They poked holes in the logic of the business models, requested proof of concept, and clarified exit strategies. This was all on public display in the Joan B. Kroc building.
Let me just emphasize how impressed I was with my fellow classmates who pitched their business models. Not only did they pitch their business models to a group of seasoned and professional angel investors, but they did so onstage and in front of a large audience of their peers. This was no ordinary class presentation. This was a high pressure environment and my classmates performed with a lot of poise and grace, representing USD and the School of Business in a remarkable fashion.
And while this exercise was certainly a terrific learning experience, there were some limitations and complications. For example, there was a bit of a disconnect evident between the entrepreneurs and the angel investors, as the pitch decks were only ideas and not at a stage ready to launch. This required the angel investors to make some assumptions, like each entrepreneur had a prototype and an established management team. With these assumptions, the angel investors committed hundreds of thousands of dollars for a percentage stake in the ownership of the company.
Of course, the money and the ownership stakes were pretend. But the exercise certainly gave the student entrepreneurs as close to a real-life experience as possible, and at the same time provided the students in Professor Lawless’ class with a very informative perspective on how entrepreneurs raise capital. Overall it was a very innovative classroom experience.
Charles is a second year student in the evening MBA program at USD and works full time at the Trans-Border Institute on campus. Upon graduation in January 2012, Charles plans to enter the private sector in a Latin American/Hispanic marketing or market research position.