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‘Creative Destruction’ Cash For MBAs

The CDL at Rotman School of Management helps innovators transition from science projects to companies. Courtesy photo

Shhh. Rotman School of Management at the University of Toronto doesn’t want too many people to know this, but 20 admits in fall 2017 will get fast-tracked into its popular Creative Destruction Lab with fellowships of up to CDN$27,000 and guaranteed internships at premier, successful startups. It’s basically the perfect opportunity for dedicated entrepreneurs.

That’s right. You heard it here first. (OK, maybe you heard it here.) It’s an “ultra exclusive” opportunity, says Niki da Silva, managing director of the Rotman full-time MBA program — a chance to join a wildly successful program that has built more than $1 billion in equity value in the five short years of its existence.

“As far as I know, we are the first MBA program to launch a stream that selects fellows at admission with guaranteed startup internship experience,” da Silva tells Poets&Quants, “and we are very excited about the talent we think this will attract. This is an ultra-exclusive opportunity, so not one we are mass marketing.”

LAB BACKS REAL WINNERS

Ajay Agrawal, Creative Destruction Labs founder and Rotman professor of entrepreneurship. Courtesy photo

Rotman’s Creative Destruction Lab (CDL) is a seed-stage program for massively scalable technology-based ventures; it was launched in 2012, da Silva says, with a goal that ventures going through the program would create $50 million in equity value within five years. Instead, she says, the equity value is now over $1 billion.

“The idea of building something massive has quite literally happened,” says da Silva, who joined Rotman the same year the CDL launched. “There have been firms that have blown up and received tremendous investment rounds.”

Founded by Ajay Agrawal, Rotman professor of entrepreneurship, CDL was formed as a way to get, and keep, hot tech ideation and creation inside Canada. “Ajay’s vision was, ‘How can we as a university and Canada as a country actually incubate some of the hottest tech startups in the world?’ And the CDL was the home for that vision,” da Silva says. “It really is about, ‘How do we mentor and massively scale up startup businesses in the tech space?’ — and our focus in CDL is on machine learning and AI companies specifically. I think we have the largest concentration of AI startups anywhere in the world through the CDL.”

Among the 47 companies that have emerged from the CDL are Kepler Communications, a space-based telecommunications company that provides Internet services for space assets; Grobo Inc., which is developing the next generation of smart gardening systems; Algocian, an image-recognition startup working to enhance the value of video-monitoring technologies; and UDIO, which makes cloud software that provides farmers with data insights to help optimize their operations. Thalmic Labs, which da Silva calls “probably one of our biggest successes,” has developed the MYO, a wearable gesture-control armband that reads muscle activity and allows control of different devices.

ROTMAN’S NAMESAKE MAKES FELLOWSHIP POSSIBLE

Niki da Silva, director of the Rotman full-time MBA program. Courtesy photo

The CDL’s success led to a small but thorny problem: Too many MBAs wanted to get into the second-year program, and many were worried about being turned away. Eventually, student candidates began telegraphing their uncertainty during the admissions process, and da Silva decided something needed to be done.

“We were hearing a subset of students in the admissions process tell us that part of why they were excited about Rotman was because of the CDL,” da Silva says. “But to get into the CDL, you had to apply and get admitted in your second year, as is the case in many business schools. A lot of places have venture-type streams, where you’re admitted to the program and then you have to get into the stream after that.”

The solution? Give 20 new, qualified admits guaranteed admission to the CDL, then sweeten the pot with a bundle of cash and a secured internship at a thriving CDL startup.

“We were trying to solve two pieces of uncertainty with the launch of this program: One was, the people who really and truly were coming to Rotman because of CDL and the type of student that we want to in the future come to Rotman because of CDL, how do we remove the uncertainty of, ‘What if I don’t get admitted?'” da Silva says. “And then the second piece is, when that same student is offered admission, they’re going to get a letter that says, ‘You’re selected as a CDL fellow. You’ve been admitted to the program with a scholarship of at least $20,000 if not more, and we are guaranteeing you a paid internship with one of the CDL startup firms.'”

CONNECTING THE DOTS ‘FOR THE STREAM OF STUDENTS THAT HAVE THE RIGHT BACKGROUND’ 

It’s only 20 spots, so the Rotman folks aren’t trumpeting the fellowship from the rooftops: “We really want to see the profile tight and the program elite,” da Silva says. But 20 x $27,000 is $540,000 — no pocket change. So how can Rotman make such an attractive offer? One reason: When school namesake Joseph Rotman died in January 2015, he bequeathed a $30 million “Rotman Catalyst Fund” to back big ideas. With Agrawal’s blessing, da Silva pitched the fellowship idea to Dean Tiff Macklem, and got the green light.

“What we’ve done is piece together what exists in models at other schools, whether it’s the Rock Fellows at Harvard, where you do get funding once you get a job,” da Silva explains. “But we’re really trying to connect the dots for the stream of students that have the right background, the passion, and the interest to keep their focus as it should be: on careers in the startup space.

“This is an offering for folks who don’t really have that full-cycle guaranteed path of what a career in an early-stage startup would look like. … Canada as a country is investing a lot in innovation, and this program is a product of that — and the program could grow in the mid-term. There’s huge potential to grow or scale down the road.”

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