MBA Adcom is not a venture capital firm

I’m sometimes asked for the greatest mistakes applicants make in MBA admissions essays, and at some point I’ll pull together my all-time list. But in the meantime, here’s a mistake that I’ve seen a lot of among clients this year so far: muddling up the demands of MBA admissions and a venture capital pitch.

What I mean is, applicants who are on an entrepreneurial track (including social entrepreneurship) and who are therefore talking about a future creating and building a firm, feel they have to make a VC pitch for their proposed venture. They seek to justify themselves in terms of potential market segments, working capital requirements, time to breakeven, and so on.

Now it is always good for MBA admissions to show detailed, careful thinking. And if your “why-an-MBA” is based on a new business, you need to talk about the proposed venture and its industry-market background in a specific and knowledgable way.

But you don’t need to make “the business case.” Adcom is not a VC firm. As long as the idea is not manifestly absurd, they can’t determine if it will actually work, nor are they ever going to try. This is not their skillset, and not their fundamental concern.

Put it this way: A VC firm will “like” a business idea if it thinks it will get out (a investment multiple of) more money than it puts in. If so, the VC will, to quote Dragon’s Den, “make you an offer,” that is, invest cash for a percentage of the business.

MBA Adcoms are not investing cash. They will “like” a business idea enough to make you an offer (an offer of a place in the b-school) if your venture seems broadly plausible, interesting, ambitious, doing something worthwhile in the world, and worthy of an MBA.

So, while you should make a general case for your new product or service, in reality the venture does not have to watertight. You can include the jumps of ambition and enthusiasm that you would have to scrub from a funding pitch.

But there is a wrinkle: Adcom is like a venture capital firm in one way. It is well known that VCs judge two things: the business idea AND the entrepreneur, because they are investing in the person or management team as much as the project. Even a mediocre idea can be a winner, if put in really competent hands. In this sense Adcom mirrors the VC, asking themselves: (whatever the applicant wants to do…) “Can he do it?” Can she pull it off?”