Standing in front of eight corporate leaders worth billions of dollars and presenting them with a new business venture is the epitome of applied classroom learning.
“Your voice falters a little bit at first,” says Trent Read. “It’s nerves; you know it’s the real deal.”
Read was part of Cougar Capital, a venture capital and private equity course for MBA students that combines in-class venture capital and private equity training with real-life application opportunities, like raising capital and co-investing in live deals with industry partners.
Creating the course was a three-year process. Instructor and associate director of the Center for Entrepreneurship Gary Williams wanted to design a class that would bridge the gap between classroom theory and business application. Seven students, who composed the first Cougar Capital team, were selected for MBA 665, the new venture capital/private equity strategy course in 2005. Now, ten students who took over Cougar Capital this fall look to build on the fund’s initial success.
“This class was an incredible opportunity,” says Scott White, a Cougar Capital student from Cumberland, Rhode Island. “It was an experience most MBA students don’t have. I jumped at the chance to be a real venture capitalist.”
Last year’s course work began with a one-day road show to the Bay Area, where students met with investors, including the venture capital division of Bank of America, to finalize funding and look at future co-investing opportunities.
After the trip, the Cougar Capital team began working with its industry partners on live deals. Before a partner venture capital firm invested in a small business or start-up, the firm had to determine the potential value and growth of the investment. The extensive research, a lengthy process known as due diligence, began with the students. It included analyzing the company’s claims, business plan, organizational management, competition, and intellectual property rights to determine its financial viability.
“Instead of just researching the company for our own sake, and our investment’s sake, we try to add value to the process and dig out gems for our industry partners,” says Brent Alvord, student managing director from Boise, Idaho.
After considering five potential investments, the students endorsed one and presented the findings to their industry partner. Six months after Cougar Capital invested in Riverbed Technologies, the company filed to go public.
Riverbed Technologies specializes in the production of Steelhead appliances, which address latency and bandwidth problems that computer network applications often experience. When the company went public in early September, it quickly surpassed preliminary expectations, closing its first day of trading at $15.30, a 57 percent increase over the initial public offering.
The training and experience Cougar Capital offers students gives them a leg-up on the job search, making them more competitive, says Joe Atkin, a Cougar Capital member from St. George, Utah.
More importantly, Williams wants his students to come away from their experience with confidence.
“It is the critical-thinking process that allows you to win competitively in the real world,” he says. “But how do you get a student to be confident that they’ve done all they can? This class meets that criterion.”