- Entries must be the original work of the entrants and may be submitted by a single student or by a multiple-student team. Each team or student may submit as many entries as they wish. However, it is unlikely that multiple entries from the same team will be successful given that the plans are judged partly on the ability of the team to execute the plan.
- The new venture idea should be original and have commercial promise. The entry may be developed in conjunction with a course or research project, and students may enlist faculty aid.
- Teams that have secured arrangements for capital from any source must disclose the amounts and sources in their applications. Entries that have received more than $1,000,000 of outside investment are ineligible to compete (excludes government grants). If you have any concerns, please reach out to the Polsky Center.
- There is no minimum or maximum team size.
- Each team is required to have at least one currently registered graduate student from the University of Chicago as an active member of the team (with limited exceptions – see below).
- Teams are highly encouraged to incorporate at least one student from Chicago Booth.
- Teams whose founding members are not current UChicago graduate students are only eligible to apply to the NVC if they have a current UChicago graduate student as an integral part of their team, with a 10% equity stake in the venture.
- Teams may have members who are not affiliated with the University of Chicago. The Polsky Center encourages teams to identify individuals, within and external to the University, who may contribute the additional expertise and experience to help the team succeed.
- Teams comprised of undergraduate students are eligible (as an exception to the graduate student requirement) only if the team has previously completed the College NVC.
- Upon acceptance into the NVC, at least one team member, who is a current UChicago graduate student, must enroll in the NVC course for credit at Chicago Booth in the spring quarter.
- Due to the employment-based nature of launching a venture and the expected activities that are required to do so, participation in the NVC and SNVC typically requires work authorization. Students interested in participating in NVC/SNVC who are not US citizens/permanent residents should review the parameters of their immigration status in the US to determine whether they may participate. Please read more here.
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 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. While the quality of management and advisors is important, it will be less of a factor in Phase I and more a factor as the team progresses to Phase III. All decisions of the judging panel will be final.
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 NVC 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 Edward L. Kaplan New Venture Challenge have taken all reasonable measures to assure that all contestants retain their rights to the Business Plan 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 the Plans 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.