On October 16th IE Business School and CajaMadrid presented the Venture Lab, an initiative whereby both organisations will foster entrepreneurial projects through a calendar of activities designed to provide incentives for innovative projects.
Venture lab will also serve as an interface for IE students and alumni and sources of funding (seed capital and expansion capital).Venture Labâ??s main objective is to provide a common platform for individuals and agents interested or experienced in entrepreneurship. The Venture Lab community comprises entrepreneurs, investors, service suppliers, consultants, industry experts and academics. Venture Lab will shorten the current gap between designing a business project and taking it to market. Ignacio de la Vega, director of IE’s International Center for Entrepreneurship & Venture Development, says that â??The Venture Lab is an ideal platform and showcase for investors, institutions and businesses interested in promoting entrepreneurshipâ?. Antonio RomÃ¡n, associate general director of Caja Madrid, stated that â??Venture lab enables young entrepreneurs to structure their business ideas in such a way as to facilitate the search for funding.â?
The Student Venture Lab was created for IE students who wish to take the project they designed as part of the Entrepreneurial Management course to the next level. In order to implement their plan they need funding, often in the form of so-called seed capital. Prof. de la Vega estimates that the average annual forecasted profit for projects presented by IE students is between 20 and 50%. De la Vega adds, however, that â??some of the projects could reach an internal rate of return of over 100%, particularly in the case of business projects in the expansion phase, where average forecast profits are significantly higher.
The Alumni Venture Lab is aimed at entrepreneurs trained at IE and who now need funding for the growth or expansion of the business project. In these cases IE tends to target risk capital. The Venture Lab calendar includes different activities for students and alumni, such as the Entrepreneurial Management Forum, the Business Plan competition, The Entrepreneurship award for the alum who best represents the entrepreneurial spirit, the Business Angels Club and the Entrepreneurship Office.
Business Plan Competition
Venture lab activities include an annual Business Plan Competition, which receives between 250 and 300 projects designed by alumni and students from different master programs (MBA, part-time MBA, Executive MBA and International MBA). The business plans must correspond to one of four basic categories: start-ups, corporate projects, family-business projects and social projects.
The business plans move through the selection process in accordance with evaluations made by IE and Caja Madrid. During the last stage a committee decides on 10 finalists who have to present their plans before a forum comprised of potential investors, held during the Venture Day. The Student Venture Day is held twice a year – during the month of July, for the October intakes, and during November, for the February intakes. Each Venture Day is attended by a committee of experts form IE, Caja Madrid, Valma Inversiones and Gavin Anderson, who select the winning project. Winners receive a follow-up of their plan by IE for a full year after winning the competition. The winning project is also awarded a loan from Caja Madrid of 30,000 Euros at 0% interest for 5 years, plus one further year of interest only payments.
The Alumni Venture Day comprises presentations before a risk capital forum by a selection of firms that seek additional funding for growth. Alumni projects for next yearâ??s competition start to come in during October, and the meeting with potential investors takes place in March of 2008.