By guest authors Irina Patterson and Vandana Upadhyay
I am talking to Linda Darragh, who is director of entrepreneurship programs and clinical associate professor of entrepreneurship at the Booth School of Business at the University of Chicago. She teaches the New Venture Lab and the Social Entrepreneurship Lab and has been a coach for the New Venture Challenge, Chicago Booth’s business plan competition. She launched the global version of the New Venture Challenge that assists executive MBA students on the London and Singapore campuses to start and expand entrepreneurial businesses. She also initiated the Entrepreneurial Immersion trip series that went to China in 2007 and to India in 2008.
Prior to this position, Ms. Darragh taught entrepreneurship courses at the Kellogg School of Management from 1999 to 2005. She organized Springboard: Mid-West, a nationally recognized investor forum for women entrepreneurs, in both 2001 and 2003. Her work with women seeking equity investment led her to initiate the Ceres Venture Fund, in which she is an investor. She is a board member of TiE Midwest, the Chicagoland Entrepreneurial Center, and the Illinois Technology Association.
Irina: Hi, Linda. I was looking up your biography on the website and I saw you have an illustrious entrepreneurial career and very interesting connections. How did you arrive at this point in your life?
Linda: I worked in early-stage financing and small business development for about three decades and started focusing on early angel venture capital for women business owners. Now I am looking at impact investing for social ventures, it is a crossover there. I have been at Booth almost five years now.
Irina: Tell us about your incubator.
Our incubator is tied to student businesses. We have students who are running their businesses and growing their businesses while they go to school.
We have opened another part of the incubator in downtown Chicago because we are overcapacity. We have teamed up with the Illinois Technology Association, which has another incubator, so that we can take part of that for students who want to move out into that incubator.
But the more important piece about this is to really understand how we help students get there.
I am going to give you some background on one of our key programs so that you understand how this is all tied up into the incubator.
We have a program we have been running for 15 years called the New Venture Challenge (NVC).
It is a business competition, but it is a bit different in that it is about an eight-month process. So, as soon as students come to the school in September, they start meeting with professors about their idea and we give them push-back; we identify mentors for them; we ask to do market research and start testing their idea.
Then, in February, we do feasibility summary for all the business ideas and concepts. The feasibility summary is about eight pages and describes market research results; who is the customer; here is how we are going to get to them; here is the product, and so on.
This year we had 88 teams, four people per team, so you could do the math on that. That is from the Chicago program. At the same time, we ran it globally and we had another 25 teams from London and Singapore. So, in total, we got almost 100 teams who have ideas and businesses that they wanted to launch.
From that, of the 88 in Chicago, we chose 24 to 25 teams to move forward, and those 25 teams go into a class in the spring quarter where they basically start presenting to industry experts and venture capitalists in the field, just to get push-back on their business models and make sure that they are pivoting and changing.
Finally, at the end of May, with the finals we have nine winning teams. The winners are allowed space in the incubator to carry on and build their businesses.
Last year we launched seven out of nine businesses that made it to the finals. Two have received venture capital financing already and are going full tilt and some of the others are still pivoting, trying to build a business model.
We totally believe in a minimum viable product, that you really have to go out and test and iterate before you out go to get funding. One really has to prove the concept, so that is part of the development piece of it.