On March 9th, we had the honor of representing IESE at the final round of the 12th Annual Arcano-IESE Impact Investing Competition. After weeks of effort, both exhausting and exhilarating, we were elated to become the first IESE team to bring home the prize! How did this happen? How can you do it next year or in years to come? Read below!
First, we had to be selected as the IESE representative team. Our trial challenge was to assess one early-stage startup from the perspective of a sustainability-focused venture capital fund. We analyzed the both the business case and the sustainability value proposition, then presented our findings in a 5-minute video for the selection committee.
The competition itself was a 48-hour sprint. This time, we were given four early-stage international startups with different business models to analyze and value along profitability and sustainability metrics. On the day of the competition, we met the founders of each and performed further due diligence. After, we selected an investment and presented our decisioning criteria and rationale to the judges. Finally, we again met with the founder of the company we selected to negotiate the terms of investment.
So how did we win? Here is our recipe:
Build a Talented Team
The five of us represented five different countries, four IESE sections, multiple industry backgrounds, and multiple post-MBA targets. Many of us had not interacted much before this, but we sure got to know each other well! In our first meeting, we each shared our personal goals for this competition. We found we were all there for the learning experience and to get to know classmates from other sections. We aligned our expectations at the start and then set out to meet them.
Share your Strengths
Our diversity was our strength. We have varied backgrounds and each bring different skills in sustainability, corporate finance, valuation, consulting, and development investing. Like tiles in a mosaic, these individual pieces together formed a comprehensive whole. We divided duties according to abilities and got to work!
Know your Network
At IESE, we have great Venture Capital resources. IESE 2nd years can take a Venture Capital elective class that culminates with competing in the annual international Venture Capital Investment Competition. The Arcano-IESE Impact Investing Competition has a very similar structure, but with an added Sustainability twist. We plugged into this network and learned how to prepare. Professors and 2nd years guided us in establishing the framework and mapping a process that would be our path to success.
Do the Work
Once we had our roles defined and the framework established, it was up to us to make it work. We tore apart the pitch decks according to our criteria. We quickly identified our preferred projects for further analysis. Crucially, we also identified projects that were not a fit. Time was short, and we could not afford to waste it! We ran the numbers for the quantitative analysis, we analyzed the market and strategy for the qualitative analysis. We looked at broad social and macroeconomic trends: was this project right for right now? We scrutinized the founding team, understanding their backgrounds, their visions, their weaknesses and how they were addressing them. Most importantly, we really dug into the impact of the business models with respect to the Sustainable Development Goals.
No matter how good a project looked from a profitability standpoint, if it didn’t meet our sustainability goals, it wouldn’t be a fit.
Put on a Show
Competition day arrived! We were ready with the material. We knew the pitch deck information inside out and backwards. We were eager to meet the founders and dig deeper. We knew every action and interaction would be fair game for the judges to assess. The initial interviews went well. We asked informed questions, getting to the core of the business models and making sure the details matched the summaries. We made an impression on the judges when we called out an inconsistency in revenue numbers, with the founder admitting the information was misrepresented in the pitch deck. After meeting the founders, we narrowed it down to one company for our investment and began preparing to present our analysis. We had already prepared the skeleton before the big day, and we filled it in with information from the founder interview. Having finished the substance with time to spare, we made sure to put effort into the presentation. We coordinated who would speak to which topics according to our individual strengths. We prepared the order and rehearsed our parts. When the time came, we wowed them. Our thorough analysis and pithy presentation convinced the judges. All that remained was the negotiation. We went through our term sheet point by point. We considered what we were asking, what the founder might say, and where we were and weren’t willing to budge. The time came, and we went to battle! We argued our respective points until time ran out, ending in a stalemate for further negotiation.
As we waited for the judges to deliberate, we fretted among ourselves, re-analysing our every word and action throughout the day. When the time finally came for the announcement, we froze with anticipation.
“And the winning team is… IESE!”
If you want to learn more about the Impact Investment Competition, we highly recommend that you join the 13th edition! Special thanks to IESE’s Impact Fund and to Arcano for putting this event together!
Written by Supriya Jaiswal, Gabriele Wiederkehr, Benjamin Torczon, David Bigorra Puente, Adrian Dewalque (MBA Class of 2024)
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