PURPOSE OF PROGRAM
To encourage the founding and growth of high-potential new ventures founded by UChicago alumni.
As a condition to receive the prize money, each winning team must agree to provide the Polsky Center with equity in the company (that was the subject of its application). The Polsky Center offers a non-negotiable version of the Simple Agreement for Future Equity (SAFE) for companies that receive prize money.
SAFE is a standard convertible equity investment instrument first introduced and used by Y Combinator for seed funding. Fundamentally (and ideally), it is an investment that converts to preferred stock at the occurrence of the next round of funding and at the same terms as that round of funding. It is not traditional preferred stock or a convertible note. It is intended to replace convertible notes by keeping a similar conversion mechanism but removing many of the problems inherent in debt instruments (e.g., interest, maturity dates, risk of insolvency, and subordination). Importantly, SAFE is unlike preferred stock in that it does not require setting a valuation of the company — that determination is postponed until the later “occurrence of a particular event”.
The Judges Panel and/or the Polsky Center reserve the right to disqualify any entry that does not meet all the eligibility requirements or that violates any rules or regulations of the Alumni New Venture Challenge.
Judging will be based on the commercial potential of the business, innovative nature and technical feasibility of the idea, the credibility of the projections and assumptions, and the ability of the team to make it happen.
PRIZES & EQUITY AGREEMENT
Cash prizes, along with any additional goods and services, will be divided among the top teams as deemed by the judging panel. The allocation of the prize money will be determined by the finals judges, based on relative merit and need. Each ANVC finalist must review the terms of the SAFE agreement provided by the Polsky Center. As a condition to receive an award, each winning team must agree to provide the Polsky Center with equity in the company (that was the subject of its application) in an amount equal to its respective award if the company receives funding or otherwise enters into a business combination transaction wherein the surviving entity receives financing or equity in another entity.
PROTECTION OF INTELLECTUAL PROPERTY
The University of Chicago, the principal sponsor and organizer, the co-organizers and co-sponsors of the Alumni New Venture Challenge have taken all reasonable measures to assure that all contestants retain their rights to the submitted materials and Intellectual Property. The co-sponsors and judges of the program include non-University of Chicago organizations that are interested in fostering the entrepreneurial process. Some of these organizations are in the business of working with and investing in the ideas of entrepreneurs. However, co-sponsoring organizations will only have access to materials with a team’s prior approval and shall make no claim to any of the property or rights.
The protection of these rights is the ultimate responsibility of each contestant. Contestants are urged to mark as CONFIDENTIAL any portion of their Entries, which they consider to be proprietary, or of a sensitive nature. Contestants should be careful about disclosing any “patentable” concepts in their Entries because, although in the United States a patent application can be filed up to one year after the first public disclosure of an invention, in many foreign countries a patent application must be filed before any public disclosure is made.