New Venture Challenge: Looking Back And Forward Twenty Years

By Harmesh Bhambra ‘16

Harmesh Bhambra '16

Harmesh Bhambra '16

The success of any program or institution at Booth can probably be measured by whether and how often it enters the consciousness of its students. And a staple of Booth student conversations this week is, “Are you entering into NVC (New Venture Challenge)?”, following the kick off of the competition last week.

On the eve of 20 years’ anniversary of NVC, ChiBus sat down with Professor Steven Neil Kaplan, Neubauer Family Distinguished Service Professor of Entrepreneurship and Finance and faculty director of the Polsky Center, to reflect on its successes and challenges.

Kaplan reminisces on how the competition was proposed by a student. “Jeff Meyer ’97 approached me in 1996 and said that we should have a business plan competition. I said, ‘Absolutely’. I wanted him to start developing the competition, and I promised to bring the money, judges and the network.”

Steven Kaplan, Faculty Director, Polsky Center for Entrepreneurship and Innovation; Neubauer Family Distinguished Service Professor of Entrepreneurship and Finance at Chicago Booth. Photo credit: Chicago Booth

Steven Kaplan, Faculty Director, Polsky Center for Entrepreneurship and Innovation; Neubauer Family Distinguished Service Professor of Entrepreneurship and Finance at Chicago Booth. Photo credit: Chicago Booth

“The competition has been successful from the beginning,” says Kaplan, but now ‘NVC’ encompasses much more than the original competition. The Edward L. Kaplan, ’71, New Venture Challenge (NVC) is the flagship competition, and three other tracks have emerged over the past decade: 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 undergraduates.

For all of these challenges Booth is competing against a huge range of accelerators -- both university and non-university -- so why has the NVC been ranked as the number 1 startup university accelerator and number 4 accelerator in the country? “It’s all about the exits. Think about GrubHub and Braintree. If you look at the largest Y-Combinator startups, some of NVC’s biggest hits are close to Y-Combinator’s top five”, describes Kaplan. Many people focus on the GrubHub ($2.5Bn market capitalization) and Braintree (acquired by PayPal for $800M) but NVC has achieved a string of successes over the 20 years: for example, 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.

GrubHub, founded by Matt Maloney ‘10, is a $2.5Bn food delivery company, and won the 2006 NVC.” Photo credit: Chicago Booth

GrubHub, founded by Matt Maloney ‘10, is a $2.5Bn food delivery company, and won the 2006 NVC.” Photo credit: Chicago Booth

We all know that the probability of having a successful exit in the startup world is small, but was the continued hosting and success of NVC also improbable? “We had some thin years; 1999 and 2002 were disappointing. But we take each year at a time and we have been getting better each year.”

NVC’s focus on rigor and experience-based learning is striking, particularly when compared to some Silicon Valley “unicorns” that are short on profitability but long on having premises that house baristas and other “amenities”. “We introduce our teams to customers and partners. When the teams present in class in April, they will get brutal but constructive feedback. Many take this feedback on board and then have significant engagement with customers and start selling, and the plans for the finals generally are much better.”

On the challenges for the NVC over the next 20 years, “The process is as good as it gets, and the mentors and advice get better each year. After the dot-com bust a lot of universities closed their programs. The challenge for us is to keep going when the current bubble deflates and ignore the noise.”

Harmesh is looking for a team to reach out to him for his participation in NVC