Marriott School of Management professor Gary Williams established BYU Cougar Capital, a course designed to give MBA students the chance to run their own venture capital and private equity fund with real money and real investments.
Eleven years later, a team of students showcased how the course has become one of the best educational VC opportunities in the country by winning the 2016 Venture Capital Investment Competition, the world’s premier VC student contest.
“I think we did a really good job of feeling like a relationship-based firm,” says Brad Hoke, a team member from Hickory, N.C., who graduated this past April. “We had a team with not just expertise but with very good personalities. We tried to offer more than just capital, we offered a partnership.”
Held at the University of North Carolina Kenan-Flagler Business School, the VCIC finals involved 13 of the globe’s top MBA programs, including eight from the United States, three from Asia and two from Europe. With the win Brigham Young University joins a group of past global champions that includes MIT, Columbia, Yale, Wharton, Chicago Booth, Berkeley and others.
“Joining the other first place schools is indicative of the quality of the BYU MBA,” Williams says. “We had a great team of students competing and we’re proud of their accomplishment.”
Each team in the competition was tasked with choosing one company to invest in from a pool of five startups. After due diligence and interviews with entrepreneurs, the teams picked one company, drew up term sheets and other paperwork, met with judges posing as investment partners in a Q&A and ultimately negotiated with the entrepreneur over terms.
After their experiences over the semester in BYU Cougar Capital working with a robust portfolio of investments, the students felt they arrived at Chapel Hill prepared to handle the intensity of the competition.
“We talked to a lot of the other teams who said they’ve done a handful of deals, read some blogs and done research, whereas we’ve looked at 30 or so deals in Cougar Capital alone,” says Doug Hicken, an April graduate from Irvine, Calif. “It helped us go in and quickly realize what needed to happen with the deal, what was important and what wasn’t.”
Hicken and Hoke joined fellow April graduates Jono Castleton from Mission Viejo, Calif., and Jorge Montalva from Viña del Mar, Chile; and first-year MBA Erika Nash from Holladay, Utah, to win the $5,000 first-place prize. But while the students are proud of the win, they expressed that the victory’s main accomplishment is how it highlights the work of BYU Cougar Capital.
“When they said our names as winners, we knew it wasn’t just us five,” Montalva says. “It was all the previous Cougar Capital students, Gary, the BYU MBA brand, our current class and the entire VC ecosystem here in Utah that guided us. It was so much bigger than us.”
BYU Cougar Capital is a student-run venture capital and private equity fund run by second-year MBA students at the Marriott School of Management. BYU Cougar Capital partners with venture capital and private equity firms throughout the country and becomes a member of the syndicate team conducting due diligence on potential investments. The fund currently holds 22 investments in its portfolio and has experienced an IRR greater than 200 percent and a 3.7x money-on-money return on 11 exits.
The Marriott School is located at Brigham Young University, the largest privately owned, church-sponsored university in the United States. The school has nationally recognized programs in accounting, business management, entrepreneurship, finance, information systems and public management. The school’s mission is to prepare men and women of faith, character and professional ability for positions of leadership throughout the world. Approximately 3,300 students are enrolled in the Marriott School’s graduate and undergraduate programs.
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Writer: Jordan Christiansen
