Last month I had the opportunity to be a judge at the Sustainable Venture Capital Investment Competition (SVCIC) at the University of North Carolina. They are the long-time home of the VCIC, the the Sustainable version is now about 5 years old. It was started by Deb Parsons who now actually works for Investors Circle in San Francisco. A Venture Capital Investment Competition is different than a business plan competition. In the latter, students present business plans and compete for funding. In this competition, real entrepreneurs present business plans, and the student teams have to choose who to fund and how to structure the deal. Students act like VCs. I competed while an MBA student at BGI and it was challenging and fun. A friend suggested I try judging in the future and I’m really glad I did.
As the Sustainable competition, it’s really an opportunity to engage around what “sustainable” does or should mean. The presenting entrepreneurs had a range of how much they themselves promoted sustainability though all had businesses related to energy, materials or waste. Those all relate to sustainability, but a differentiator is where pushing sustainability falls within the priority list of the founder. Is she looking for new opportunities that advance sustainability? Or is she looking for new opportunities because of where she has leverage over others or where she has friends in business? It doesn’t have to be a case of business vs. non-business thinking: those could all be valid ways of finding new opportunity; it’s your priorities that determine which ones you look for. Businesses are now reaping energy efficiency gains that they could have before but it just wasn’t a priority, things like adding skylights to commercial shopping areas to cut lighting costs. It also helps to have it become a business-community-wide priority because there are more products and services to help you, and more leaders to watch and imitate. For would-be sustainable investors, the goal is to find those leaders.
The format of the competition is inevitably artificial: teams get business plans ahead of time; entrepreneurs present for 15 minutes, so far so good. But then each team gets 15 minutes to ask questions of their entrepreneur and that’s it. They have overnight to design their deal and make presentations for us, the judges, to see the next day. So judging is a little crazy – I watched 8 teams ask similar questions of the same entrepreneur for 15 minutes each and then had all of 5 minutes to write notes about it. Entrepreneurs who agree to this process definitely have to have patience!
It was fascinating to be a judge and watch how different teams posed questions. For example one team asked “aren’t your competitors going to make countermoves to put you out of business?” Another team asked “if you win in this business, who will be the losers?” Those are two very different ways to get into the same conversation. It was also helpful to watch different teams try to probe the entrepreneurs on their commitment to/interest in sustainability. It ranged from a single question of “you mentioned sustainability, what are your strong points?” to a multiple question drill-down that seemed very confrontational. As an observer I could really see how unhelpful it was to drill down. Either the entrepreneur has a priority of sustainability and will talk about it given an opportunity, or they don’t and trying to beat them up about it at best gives them an opportunity to catch on and greenwash and more likely just beats them up needlessly over a non-shared priority. There are businesses out there that are contributing to sustainability without focusing on it, but business is also about adapting to change and growing. If it’s not a priority at the top then I don’t think it’s really part of the company. Net, I felt like I learned something about improving the dialog between entrepreneurs and sustainably-minded investors.