UM team seeks first prize in venture capital contest

M.B.A. students win 2nd place in region, vie to be tops in U.S.

March 30, 2001|By Gus G. Sentementes | Gus G. Sentementes,SUN STAFF

A group of M.B.A. students at the University of Maryland are proving that the school can excel in the boardroom as well as on the basketball court.

As part of the University of North Carolina at Chapel Hill's annual venture capital investment competition, the five-student Maryland squad bested such business schools as those of Duke University and Wake Forest University to win second place in the regional competition and a $2,000 prize.

UNC-Chapel Hill won the regional contest.

Now the UM students are competing against seven schools in the national competition, which began last night. At stake are a $10,000 first prize and bragging rights among some of the best business schools in the country. The winner will be announced tomorrow.

"There's only so much you can learn about venture capitalism in a classroom setting - it's a very complex business," said Jeff Reid, the competition's coordinator and executive director of UNC-Chapel Hill's Center for Entrepreneurship and Technology Venturing. "Through the ... [competition], students get the opportunity to really feel what it's like to be a venture capitalist."

The contest, now in its fourth year, is unlike most business school competitions in which graduate students typically put together a mock business plan and pitch it to judges or business leaders. Instead, the teams of students interview executives from real start-up companies, prepare analyses and decide how much money to give each company from a mock portfolio of $200 million dollars.

While the students get to hone their skills, the judges, who are drawn from investment and venture funds, have an opportunity to network with fresh M.B.A. talent and meet executives who seek financing for their start-up companies.

And that market has grown increasingly tighter in recent months. Venture capital investments slowed to $20.4 billion in the final quarter last year, compared with $28.6 billion in the previous third quarter, according to the National Venture Capital Association.

"Last year, when we ran this event and companies were getting funded right and left, it was harder to get a company to participate," Reid said. "This year, the companies are eager to refine their pitch and to get in front of real venture capitalists."

The five graduate students from the University of Maryland had to beat seven other graduate teams from the Robert H. Smith School of Business. In both the campus and regional competition, real start-up companies presented their business plans to the students while judges from the local investment and venture capital community evaluated the students.

All of the student teams went through a four-week intensive tutorial on the fundamentals of venture capital, said Rosel Halle, associate director of the Dingman Center for Entrepreneurship. The team competing now at UNC-Chapel Hill - Matthew Hamilton, Roy Schwartz, Doug White, Allison Helminski and Jeffrey Kummer - had a mix of school and work experience to carry them over the top.

"I think they were realistic about how to manage the portfolio they were given. That's how they distinguished themselves," Halle said.

Those competitors include the University of Pennsylvania; the University of Michigan; the University of California at Los Angeles, UNC-Chapel Hill, Washington University in St. Louis; Yale University; and San Diego University.

Maryland placed third in the regional competition last year and did not advance to the national competition.

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