PURPOSE OF PROGRAM
To encourage the founding and growth of high-potential new ventures with a social mission.
- There is no minimum or maximum team size, however, each team is required to have at least one currently enrolled graduate student at the University of Chicago. Alumni of the university and individuals not affiliated with the university are eligible to apply to the SNVC as long as they have at least one current UChicago graduate student as an integral member of the team (i.e., someone with a minimum of 10% equity stake in the venture). Only current UChicago students are allowed to present in class and at the finals event; other team members may participate in the Q&A only.
- Entries must be the original work of the entrants and may be made by a single-student or by multi-student teams. It is highly encouraged to submit an application to the SNVC as a team with cross-functional expertise. 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.
- SNVC teams can be for-profit or nonprofit organizations. The venture idea should be original, have commercial promise, and have a business model with a social mission at its core. 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 Phase I executive summaries. Entries which have received significant outside investment from venture capital firms, private investors, or other industry sources may be considered ineligible to compete and should contact Will Colegrove (email@example.com) in advance for confirmation.
- Teams comprised of undergraduate students are eligible if the team has previously participated in the College NVC, or the team includes at least one current graduate student. A team of all undergraduate students will not be eligible for the SNVC if neither of these criteria has been met.
- Teams may have members who are not affiliated with the University of Chicago. The Rustandy 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.
- Upon acceptance into the SNVC, at least one team member must enroll in the New Social Ventures course at Chicago Booth in the spring quarter.
As a condition to receive the prize money, for-profit winning teams must agree to provide the Rustandy Center with equity in the company (that was the subject of its application). The Rustandy Center offers a non-negotiable version of the Simple Agreement for Future Equity (SAFE) for companies that receive prize money. Nonprofit winning teams will receive funds as a grant.
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 Rustandy 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 Social New Venture Challenge.
Judging will be based on the commercial and social 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 SNVC finalist must review the terms of the SAFE agreement or grant agreement provided by the Rustandy Center. As a condition to receive an award, each winning for-profit team must agree to provide the Rustandy 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 John Edwardson Social 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.