A Seat on the Other Side of the Table
McCombs Venture Fellows program offers students real-world experience in exclusive venture capital industry
Denton Newham, MBA ’06, has met with more than 20
companies seeking venture capital in the last six
months—and he’s about to meet with yet another.
Most are young companies, barely out of startup mode and hoping to get the funding they need to achieve that next stage of success. In this particular meeting, Newham is raking through a fledging company’s business plan with a fine-tooth comb, asking the hard questions that could mean the difference between a high-dollar check and a “thanks, but no thanks.”
“What’s the revenue of your segment?” “What does it cost to produce your product?” “Are you pursuing any patents?” “What’s your value proposition for this market?” and “What are your plans for this seed financing?” are just a few of the answers Newham seeks from the company’s founders.
It’s the kind of give-and-take, meet-and-greet, fact-finding conversation where venture capitalists get to know the company and its founders—and Newham is on the asking side. The answers to those questions have afforded him valuable insight into what makes a successful startup.
“Early-stage investing really comes down to the people,” says Newham. “Once you’ve qualified the market, verified the technology and devised a plausible exit strategy for the company, as an investor, you have to take a step back and decide whether or not you have faith in the entrepreneurs.”
Newham’s unique place at the table is the sort of real world, in-the-trenches experience that hiring companies dream about in MBA job candidates—and it’s an experience he’s privy to as an MBA student selected to participate in the McCombs School’s Venture Fellows program.
Established in 1999 by James Walbom, MBA ’01, to connect the venture capital community with talented MBA students, the program allows students to gain firsthand experience with venture capital companies while pursuing their MBAs. Far from a club for MBA students, Venture Fellows is its own startup—a separate organization outside of the McCombs MBA Program entirely managed by MBA students, funded by outside sponsors and designed to attract a diverse group of students across all business disciplines.
A third of this year’s students had finance backgrounds and two-thirds had engineering, technology, marketing and entrepreneurial backgrounds.
Its board of directors includes members of top venture firms and those involved in the startup community, including Access Venture Partners, Hunt Ventures, G-51 Capital, Sentient Ventures and the Austin Technology Incubator.
“There is nothing else like this out there,” says Jeffrey Tusa, MBA ’06, student director of last year’s Venture Fellows program. “Students get to sit on the other side of the table and really see the thought process of an investment professional.”
Benefits For All
In addition to students’ gaining hands-on experience in the venture capital industry, Tusa says the participating firms also benefit, namely by getting the fresh outlook of astute, intelligent and talented students with solid work experience.
“They don’t always have the time to do the detail work of sifting through business plans and researching markets,” says Tusa, who is continuing his career in investment banking at Stephens, Inc. after graduating in May. “That’s where we come in and add value.”
For their part, the firms appreciate the student’s perspectives—often, ideas they may not have considered otherwise.
“The intelligence the Venture Fellows have brought to us has been outstanding, and they have a youthfulness and energy,” says Jay Campion, managing director of Austin-based Access Venture Partners, an IT generalist fund and Venture Fellows participant. “They have a thirst for knowledge. Most are new to this, and they just go for it.”
Most are young companies, barely out of startup mode and hoping to get the funding they need to achieve that next stage of success. In this particular meeting, Newham is raking through a fledging company’s business plan with a fine-tooth comb, asking the hard questions that could mean the difference between a high-dollar check and a “thanks, but no thanks.”
“What’s the revenue of your segment?” “What does it cost to produce your product?” “Are you pursuing any patents?” “What’s your value proposition for this market?” and “What are your plans for this seed financing?” are just a few of the answers Newham seeks from the company’s founders.
It’s the kind of give-and-take, meet-and-greet, fact-finding conversation where venture capitalists get to know the company and its founders—and Newham is on the asking side. The answers to those questions have afforded him valuable insight into what makes a successful startup.
“Early-stage investing really comes down to the people,” says Newham. “Once you’ve qualified the market, verified the technology and devised a plausible exit strategy for the company, as an investor, you have to take a step back and decide whether or not you have faith in the entrepreneurs.”
Newham’s unique place at the table is the sort of real world, in-the-trenches experience that hiring companies dream about in MBA job candidates—and it’s an experience he’s privy to as an MBA student selected to participate in the McCombs School’s Venture Fellows program.
Established in 1999 by James Walbom, MBA ’01, to connect the venture capital community with talented MBA students, the program allows students to gain firsthand experience with venture capital companies while pursuing their MBAs. Far from a club for MBA students, Venture Fellows is its own startup—a separate organization outside of the McCombs MBA Program entirely managed by MBA students, funded by outside sponsors and designed to attract a diverse group of students across all business disciplines.
A third of this year’s students had finance backgrounds and two-thirds had engineering, technology, marketing and entrepreneurial backgrounds.
Its board of directors includes members of top venture firms and those involved in the startup community, including Access Venture Partners, Hunt Ventures, G-51 Capital, Sentient Ventures and the Austin Technology Incubator.
“There is nothing else like this out there,” says Jeffrey Tusa, MBA ’06, student director of last year’s Venture Fellows program. “Students get to sit on the other side of the table and really see the thought process of an investment professional.”
Benefits For All
In addition to students’ gaining hands-on experience in the venture capital industry, Tusa says the participating firms also benefit, namely by getting the fresh outlook of astute, intelligent and talented students with solid work experience.
“They don’t always have the time to do the detail work of sifting through business plans and researching markets,” says Tusa, who is continuing his career in investment banking at Stephens, Inc. after graduating in May. “That’s where we come in and add value.”
For their part, the firms appreciate the student’s perspectives—often, ideas they may not have considered otherwise.
“The intelligence the Venture Fellows have brought to us has been outstanding, and they have a youthfulness and energy,” says Jay Campion, managing director of Austin-based Access Venture Partners, an IT generalist fund and Venture Fellows participant. “They have a thirst for knowledge. Most are new to this, and they just go for it.”
