At first glance, Tovala’s Chicago headquarters looks like an ordinary apartment. But upon opening the front door to the office space, located in the city’s River West neighborhood, visitors are greeted with an open space filled with boxes, home goods and employees buzzing like worker bees. Some cooked in the test kitchen. Others sat at their desks typing away on computers or chatted in the conference room.
“The nature of our business is there’s software, there’s hardware and there’s food, which is why there’s ovens everywhere and there’s a test kitchen and there’s software engineers right behind us,” David Rabie, Tovala’s co-founder and CEO, says while sitting in a quiet conference room. “It makes it fun.”
Tovala, which sells healthy food that can be cooked in its internet-connected ovens, won the University of Chicago’s New Venture Challenge in 2015, taking home $70,000. Founded in May 2015, the company has since grown to about 50 employees and ships food to customers in 48 states.
The university’s strong entrepreneurship program, including the New Venture Challenge, attracted Rabie to the Booth School of Business. He reasoned that he would start the company in his second year of school, anticipating that he would have to leave school early if the company took off. And when it did, he left.
The New Venture Challenge “definitely opened up a lot of doors, because we won the competition,” Rabie says. “There have been a lot of people who we’ve met who’ve invested in our business because of the University of Chicago and by extension by the New Venture Challenge, but they didn’t invest, because we won the New Venture Challenge. It was a door that was opened that eventually led to investment.”
While most university students don’t see a return on their higher education investment until after they’ve entered the job market, Booth students can use the New Venture Challenge to get the funding they need to kickstart their companies before they cross the stage at graduation.
What began as a student-requested competition has since grown to be the go-to spot for a select few Booth students to hone their enterprise ideas, perfect their pitching technique, get press exposure and attract once out-of-reach investors.
A student-led contest
The University of Chicago launched the New Venture Challenge in 1996, during the dot-com era. Students initially called for the pitching contest, but the university soon recognized its potential and decided to invest in formal resources and infrastructure into it, says Starr Marcello, executive director and adjunct professor of entrepreneurship.
To date, the contest has funded the launch of more than 230 companies that still operate—most notably Braintree and Grubhub—and boasts more than $13 billion in mergers and exits, according to the university’s website. Like other pitching contests and accelerators, the startups have to be vetted before they can participate. Unlike typical competitions, the New Venture Challenge is a 10-week Spring Quarter class.
Since its founding, the contest has added more tracks: the Global New Venture Challenge, for executive MBA students in Chicago, Hong Kong and London; the Alumni New Venture Challenge, for all University of Chicago alumni; the Social New Venture Challenge, for not-for-profit organizations or businesses with a social mission; and the College New Venture Challenge, for undergraduate students. The high demand from students and alumni, as well as the desire to reach different kinds of investors, has driven the university to expand the challenge, Marcello says.
To participate in the challenge, entrants must be either University of Chicago graduate students (except for undergraduate students for the college track) or have a student (or alumni for the alumni track) with at least a 10 percent stake in the company, per the university’s guidelines.