Impact Fall 2023

Patriot Pitch Competition showcases idea and early-stage business ventures that have the potential to change the world

Marianne Klinker — Thu, 20 Apr 2023 18:03:50 +0000

Patriot Pitch Competition showcases idea and early-stage business ventures that have the potential to change the world Marianne Klinker Thu, 04/20/2023 - 14:03

Move over Shark Tank, Mason’s Patriots have arrived.

Fifteen teams competed for $40K in prizes at the ��AV School of Business Patriot Pitch Competition during the in-person April 13 event on Mason’s Fairfax Campus. With the Patriot mascot handing out checks to the top winners of the day, nine teams of Mason entrepreneurs walked away a step closer to realizing their dreams of launching or growing their own startup businesses.

Patrick Soleymani

“We take great pride in being ranked as Virginia’s most innovative university,” said Patrick Soleymani, associate dean for outreach and strategic engagement at the School of Business. “The Patriot Pitch Competition is just one example of the Business School’s investment in the next wave of regional entrepreneurs and our commitment to growing this ecosystem nationwide.”

Now in its 22nd year, the Patriot Pitch Competition (formerly the Dean’s Business Plan Competition) was open to Mason students and recent alumni from all majors/fields of study and brought nearly 50 applicant teams from across the university. The event, led by the Center for Innovation and Entrepreneurship, held two rounds of competition for entrants. In the first round, a committee from the School of Business, consisting of faculty and local entrepreneurs, reviewed the applications. Four teams from each track were then selected and invited to the final round, where they pitched their ideas live and before an audience of nearly 200 students, alumni, faculty, staff, and community members throughout the event.

School of Business Dean Ajay Vinzé

In welcoming students to the event, School of Business Dean Ajay Vinzé emphasized Mason’s rich ecosystem of innovation and entrepreneurship that includes the Center for Innovation and Entrepreneurship, Mason Innovation Exchange (MIX), Mason Enterprise Center, National Science Foundation’s I-Corps™ Hub site, and Accelerate Investor Conference 2023, which is scheduled for November. Also speaking at the event were Paula Sorrell, associate vice president for innovation and economic development; Gisele Stolz, senior director of entrepreneurship programs within the Office of Research, Innovation, and Economic Impact; and Eddie Hill, business incubator director for the Mason Enterprise Center.

Nicole Washington

In her keynote address, Nicole Washington, founder and CEO of Boralogix, Inc., honed in on the importance of the three C’s of innovation: currency, clarity, and community. She implored the student entrepreneurs to look beyond the capital from angel investors and venture capitalists, to planning on how to invest their own capital and having some “skin in the game”. Her recommendation for presenters was to know your customer, know your pitch, and to remember to create diverse teams. She closed her inspirational talk on the importance of a strong community of supportive family and friends and of always giving back. She reminded students that we are facing unprecedented global challenges that can disrupt or even eliminate our way of life, and we should be looking at new ideas and business ventures that can truly change the world.

When the competition began, the student teams answered with a wide range of new ideas and early-stage business ventures that delivered on her challenge…in a big way.

Patriot Pitch Judges

Judges for the event evaluated the presentations, selecting a first and second place team in each of the following four tracks: Public Engagement, STEM, Social Impact, and General Entrepreneurship. In addition, audience members used the PollEverywhere app to vote for their favorite pitch in the Mason’s Choice Award prize for each track.

For the Public Engagement track, taking both the first place prize and the Mason’s Choice Award was By Easy AI, a no-code tool that brings the full potential of Machine Learning and AI to low-tech enterprises, allowing them to mine data for actionable insights and to optimize their business analytics. Coming in second place was Muse Management, an event management company focused on increasing art visibility in the community through fun events that include immersive experiences.

For the STEM track, once again, the first place prize and Mason’s Choice Award aligned, and were both awarded to Designer Contrast Agent Platform, an economic, size-tunable, and biofriendly contrast agent platform that targets deep tumor tissue to create high contrast, high resolution images of cancerous tumors. The platform can be synthesized in a few steps and can be scaled-up for industrial manufacture. Second place went to NaviSleeve, an unobtrusive, wearable controller for Virtual Reality/Augmented Reality (VR/AR).

For the Social Impact track, the first place prize and Mason’s Choice Award went to Legal Language Simplified (LLS), which provides accurate, human-certified translations for non-English-fluent, at-risk minorities in the U.S. through a proprietary deep learning technology. LLS ensures that hard-working immigrants trying to live the American dream fully understand their rights and responsibilities. Second place went to Chelonii, an activewear and lifestyle brand focused on products that are made from organic and recycled materials, with 10% of their proceeds going toward removing ocean pollution.

For the General Entrepreneurship track, first place went to UKIE Candles, maker of hand-poured pillar candles made of 100% organic-sustainable soy wax. "Ukie" is a colloquial term for Ukrainians living in America and 25% of all sales revenues are donated to Ukrainian families impacted by the ongoing war. Second place went to Senior FitLife, which offers in-home personal fitness training services for seniors. Mason’s Choice Award went to PyroSound.studio, producing temperature-regulated pyroboards with dancing flames that move to the sound of the music.

2023 Patriot Pitch Competition Participants

Powering the success of our student and alumni pitch teams were 13 mentors, who are CEOs, consultants, entrepreneurs, startup coaches, faculty members, and Mason alumni. Our mentors were a critical source of value to our pitch teams, providing real-world experience starting and managing startups. Our judging panels comprised 16 local business leaders whose professional experience includes consulting, derivatives exchange, energy consulting, food technology, nonprofits, and venture capital.

Additionally, Kuzeyhan Ozdemir, I-Corps™ program manager, George Siragusa, Mentor in Residence at the MIX, and Lisa Shapiro, assistant director of entrepreneurship programs in the Office of Research, Innovation, and Economic Impact, organized two intensive ICAP/I-Corps™ training sessions, in-person and via Zoom, along with weekly pitch practices in the MIX to help the finalists prepare for the big day.

Three high school students from Thomas Jefferson High School for Science and Technology joined in the fun as volunteers to help support the operations of the event. It was a great experience for them to watch the pitches, to learn from real entrepreneurs and judges, and to see the resources available for entrepreneurs at Mason.

Many generous sponsors also helped to make the day’s event successful, including 22nd Century Technologies, Inc., the Leading Innovation Sponsor for the event, as well as the Greg and Camille Baroni Center for Government Contracting as the Public Engagement Track Sponsor, College of Engineering and Computing and the College of Science as co-STEM Track Sponsors, the School of Business  Women in Business Initiative Advisory Board as the Social Impact Track Sponsor, and the School of Business Management Advisory Council as the General Entrepreneurship Track Sponsors.

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Mason researcher helps the SEC walk the talk

Marianne Klinker — Tue, 31 Jan 2023 14:37:09 +0000

Mason researcher helps the SEC walk the talk Marianne Klinker Tue, 01/31/2023 - 09:37

Research by Mason Accounting Professor Bret Johnson, a former SEC staff accountant and academic fellow, shows how seemingly mundane intra-agency policies can have unintended effects that benefit Wall Street over Main Street.

The U.S. Securities and Exchange Commission (SEC) has long seen itself as a friend to the retail investor, doing everything it can to ensure that financial markets offer both large and small players roughly equal opportunity to succeed. Most recently, that mandate provided the rationale for a slate of sweeping rule changes that would, among other things, shine a light on the opaque business arrangements between wholesale brokers and trading apps such as Robinhood. It adds up to what some industry insiders are calling the largest-scale SEC intervention in nearly 20 years.

Bret Johnson

To its credit, the SEC is just as committed to promoting fairness and transparency in-house as it is to ambitious industry reforms. The agency even invites accounting academics to research its inner workings via the SEC Academic Fellowship Program. ��AV School of Business accounting professor and former SEC staff accountant Bret Johnson was selected for the year-long program starting in August 2020.

Johnson says, "My role was to be a liaison between the SEC and the academic community…Often, my research uncovers some problem or something they can improve on, some inefficiencies. And I found they are very open to embracing this type of research."

For example, Johnson's recent research paper in Review of Accounting Studies co-authored by Michael Iselin of the University of Minnesota, Jacob Ott of the London School of Economics, and Jacob Raleigh of Monash University, finds that while the SEC's monitoring arm – the Division of Corporation Finance (DCF), where he worked for six years – seems to focus less on firms with a high percentage of retail ownership, the Division of Enforcement (DOE) appears to take a harder line with these firms. In other words, irregularities are less likely to be spotted early and addressed through non-punitive means when the firm in question has a larger proportion of retail investors.

"My role was to be a liaison between the SEC and the academic community…Often, my research uncovers some problem or something they can improve on, some inefficiencies. And I found they are very open to embracing this type of research." - Bret Johnson

The SEC's enforcement-heavy approach may disadvantage retail investors because once the enforcement action becomes common knowledge, the "Main Street" investors who hold disproportionate stock in the target company will lose out when the share price falls. In this way, the SEC does not seem to be acting in accordance with its stated mission to protect mom and pop investors.

Johnson can only guess at what's going on here. He speculates that firms that attract retail investors may share other characteristics that cause the SEC to flag them for enforcement rather than monitoring. For instance, the paper finds that retail ownership was positively associated with firm visibility and performance volatility, and negatively associated with external monitoring and structural complexity. The discrepancy may also have to do with how resources are distributed between the DOE and DCF.

In other cases, the agency's good-faith attempts to increase market transparency on behalf of less savvy investors can backfire. Based on analytics from the publicly available filings database on the SEC website, Johnson's 2020 paper in The Accounting Review, co-authored by Michael S. Drake and Jacob R. Thornock of Brigham Young University, and Darren T. Roulstone of The Ohio State University, concluded that institutional users (e.g. investment banks, hedge funds, asset managers, and financial institutions) were profiting handsomely from their search activities on the online resource, while retail investors saw little to no benefit. Abnormal search volume from Wall Street was associated with future returns for the focal firms of up to 10.5 percent. No such pattern was seen on Main Street.

In addition, how the SEC balances the need for transparency against its relationships with companies can have unintentional knock-on effects. Johnson’s 2022 paper in Management Science, co-authored by Marshall A. Geiger and Abdullah Kumas of the University of Richmond, and Keith L. Jones of the University of Kansas, found that for companies that had just received an SEC comment letter, there was a sizeable uptick in sell-offs among mutual funds and other major players during the short period (initially 45 days, then shortened to 20 days) before the letter went public. The best explanation was that high-ranking executives were sharing non-public information with investors close to the company concerned.

The 20-day privacy window is meant to prevent companies’ confidential information from being accidentally released through an over-hasty process. But it may also create information asymmetry that benefits industry insiders at the expense of retail investors – the very favoritism that the agency intends to combat.

There are no simple answers to the questions posed by Johnson’s research. Even seemingly mundane intra-agency decisions, such as resource allocations and the length of the confidentiality window for comment letters, can have complicated ripple effects. Sometimes, it takes an informed outsider to trace these ripple effects and draw evidence-based conclusions. "I am happy to see that the SEC continues to solicit – and take seriously – academic research into its policies and practices," Johnson says. After all, sweeping industry reforms may make headlines, but fine-tuning how the agency itself functions is a quieter but no less material way of promoting fairness and transparency in financial markets.

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Building a 'digital twin' of the real world

Jennifer Anzaldi — Mon, 26 Sep 2022 14:02:39 +0000

Building a 'digital twin' of the real world Jennifer Anzaldi Mon, 09/26/2022 - 10:02

In This Story

Jingyuan Yang

As artificial intelligence (AI) has become more adept at anticipating people’s wants and needs, predictive algorithms have been mingled with almost everything we do digitally. When we are done watching a Netflix show, they take the liberty of queueing up the next one—they finish our sentences in Outlook and Gmail.

Jingyuan Yang

In the offline world, however, the complex and multidimensional nature of many of our most pivotal decisions defies algorithmic analysis. That is, unless AI can learn to detect how real-world contingencies, such as specifics of time and place, govern our choices.

Jingyuan Yang, an assistant professor of information systems and operations management at ��AV School of Business, is at the forefront of AI research that aims to crack the codes of the physical world. Her results so far point toward innovative solutions for some of the biggest societal, governmental, and business challenges we face.

Several of her papers to date investigate urban bike sharing, a “last mile” extension of public transport systems designed to coax commuters out of their cars. Some early adopters of bike sharing, such as New York City and Taiwan, have seen long-term success with the model. But elsewhere, including major Chinese cities, oversaturation has led to bicycle-flooded sidewalks or, even worse, rivers and vacant lots turning into bicycle graveyards—an environmental disaster that produced friction with local politicians.

Yang discovered that in Shanghai, part of the problem was that the distribution of bikes across the city did not match demand. Some areas had far more available bikes than riders, while in others the opposite was the case. Additionally, Shanghai’s system allowed commuters to dismount wherever they chose. This dockless model made predicting rider demand even more challenging, as bikes could be located virtually anywhere.

With a team of six other researchers[1], Yang developed a data-driven model for predicting traffic flows within dockless bike-sharing systems, based on a dataset provided by leading provider Mobike. Spanning the period February 2017-March 2018, the Mobike data contained more than 957 million riding records from nearly 315,000 shared bikes.

The research team extracted flow patterns from the data by partitioning the city and “smoothing out” areas with the lowest levels of activity. The resulting grid-like “flow matrix” carved Shanghai’s bike traffic into spatio-temporal snapshots that could be studied and compared. After clustering these based on their similarities, the researchers could construct “base matrices” that provided broader, deeper points of reference for prediction than temporal or geographic cues alone. Using the base matrix, the algorithm could identify emergent patterns in a certain area as those associated with central business districts on a rainy holiday morning and forecast bike traffic in that area over the next few hours accordingly.

Yang says she was surprised by what this technique of algorithmic mapping revealed. “There are a number of surprising factors we can discover that cannot be covered by traditional model analysis. As an example, we find that there is a slight increase in bike traffic near subway stations during rain, because people want a shorter commute,” she says.

The team tested their model against six other algorithms designed for the same purpose, to see which was the most accurate at predicting actual bike traffic flow in Shanghai. Yang’s team’s solution consistently outperformed the rest on sample datasets for regular working days, rainy working days and holidays–meaning it achieved the lowest degree of prediction error. Perfect predictions are impossible, because all sorts of irregular real-world occurrences, from auto accidents to one-off public events, can cause traffic on a given day to break with the pattern. “Really odd events, we cannot capture,” Yang says. “But the base matrix lets us capture basic trends.”

For Yang, optimizing bike sharing is part of a necessary push toward environmentally sustainable options for urban living, including fewer polluting modes of transport. “All these papers are intended to help companies go a more sustainable way and help the user to tackle the last mile in an eco-friendly manner-without waste and damage to the environment.”

With some tweaks to the logic, however, the same AI-based methods can apply to a range of pressing business issues. The territory mapped by algorithms need not be geographical; researchers can also “map” a network of individuals or companies. Yang’s experiment in the field of B2B marketing is a case in point. She helped build[2] an automatic recommendation engine for marketing campaigns based on customer profiles (similar in concept to the bike-sharing base matrices) reflecting corporate affiliation as well as individual employee status. Customers from the same “region” on the grid, i.e. the same company, are treated holistically to improve recommendation quality.

“When you’re selling to a company, you’re usually dealing with a group of decision-makers who are at different buying stages," Yang explains. "To estimate buying propensity, you need to consider that they may share information. Their behavior should be considered together. Therefore, we use matrix representation to extract their shared knowledge.”

One of Yang’s current research projects focuses on predicting employee flow within networks of companies, again borrowing spatio-temporal techniques. Similar to Shanghai’s urban environment, the job-hopping professional grid has its own version of “weather”—favorable or gloomy economic conditions – that may alter the pattern.

“Based on different job positions, you can group the companies. You can aggregate company profiles and predict, collectively, how many people will leave based on the stock price,” she says.

Yang’s research suggests that by building a chessboard-like “digital twin” of the real world, spatio-temporal AI solutions can help business and society predict–and thus prevent–harmful losses such as human capital flight and damage to the natural environment.

[1] Jingjing Gu, Qiang Zhou and Yanchao Zhao (of Nanjing University of Aeronautics and Astronautics), Yanchi Lui and Hui Xiong (of Rutgers University), Fuzhen Zhuang (of Chinese Academy of Sciences)

[2] In collaboration with Chuanren Liu (of Drexel University), Mingfai Teng and Hui Xiong (of Rutgers University) and Ji Chen (Google).

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The distress anomaly: Where finance theory breaks down

Jennifer Anzaldi — Thu, 22 Sep 2022 13:54:03 +0000

The distress anomaly: Where finance theory breaks down Jennifer Anzaldi Thu, 09/22/2022 - 09:54

In This Story

Alexander Philipov

Exceptions may prove the rule, but they must first be explained. That is why finance researchers are drawn to the distress anomaly-- a well-documented phenomenon that challenges the risk-return paradigm in equity markets. Generally, higher-risk investments are expected to yield higher returns than safer, more stable securities. In recent years, however, studies have shown that high-credit-risk securities for companies in distress – i.e. when their already-low credit rating is being downgraded -- realize abnormally low returns compared to non-distressed securities of the same or lower risk.

��AV have proposed a range of rationales for this puzzle. Alexander Philipov, finance area chair and associate professor at ��AV, says they mainly fall into two categories. One is risk-based, stating that the pattern could be explained by time-varying risk (e.g. having low risk in bad times), or by hidden value transfers during bankruptcy, when equity holders could extract value from other stakeholders. The other rationales look at possible investor biases, such as investors having lottery type preferences and chasing after sky-high returns in an unlikely recovery from distress. Other psychological biases, such as tendencies to hold on to losing stocks in the hope they would turn around may also be at play. These biases would be exhibited by retail investors while institutional investors are not likely susceptible to them. As yet, there is no consensus among academics on which rationales, if any, get closest to the truth of the distress anomaly.

Philipov’s recent paper in Review of Finance[1] is the first to show that the distress anomaly extends to corporate bonds. In addition, the anomaly is associated with potentially severe implications for the real economy. The researchers documented this by comparing the stock and bond portfolios of distressed firms with those of other portfolios.

Corporate bonds help evaluate existing rationales because their payoff structure, liquidity, and investor base are different from those of stocks. The study shows that existing rationales for the distress anomaly are inconsistent with the return patterns of corporate bonds. Specifically, rationales involving value transfers from bondholders to stockholders are inconsistent with the data showing that both bonds and stocks of distressed firms are similarly overpriced. Furthermore, the anomaly is more pronounced in market downturns, as is the distressed stocks and bonds’ risk—evidence against the time-varying risk story.

The study also finds the distress anomaly implies real distortions in the real economy because corporate decisions are undertaken based on incorrect asset prices. These suboptimal decisions may include excess investments, and over issuance of debt and equity. “We provide suggestive evidence that real distortions are not only economically significant but also severely understated if measured based on equity mispricing alone (as in previous studies). Adding bonds brings new light to the magnitude of these distortions,” says Philipov.

Based on the new bond evidence, the most coherent rationale for the distress anomaly appears to be underreaction to financial distress, even by the most sophisticated investors. The researchers conclude that the distress anomaly is an unresolved puzzle, deeper than previously thought.

Philipov suggests that future research on the distress risk anomaly may focus on alternative ways of measuring risk or on new advances in behavioral finance, such as cumulative prospect theory which focuses on how investors under- or overestimate probabilities. Clues may also lie in the investment strategies of smart market actors. “If there are many investors with biases, especially biases that you could possibly predict, you should be able to find market players which are exploiting these biases,” Philipov says. Lack of evidence of such profit-taking activity may imply that trading frictions may be too high to take advantage of pricing misalignments. Yet another promising research strategy could be to look beyond the data, into what really goes on behind the scenes at distressed companies. “Maybe what those public investors are losing, there are some players that are gaining from it,” Philipov says. “But we’re not able to observe that.”

He further suggests that interdisciplinary work may be able to tackle questions such as, “Do distressed companies advertise more or less? Do they allocate less for research? What do their operations look like? Are they trying to apply new management techniques or are they quickly losing talent?”

��AV are drawn to find explanations to market phenomena like the distress anomaly where theory breaks down. “We should be trying to explain what’s going on, because that’s where you get new insights: studying corners where things aren’t working as general theory dictates,” Philipov says.

[1] Co-authored by Doron Avramov of ISC Herzliya, Tarun Chrodia of Emory University and Gergana Jostova of George Washington University.

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Learning by experience: Students raise $1.25 million for Student-Managed Real Estate Fund

Jennifer Anzaldi — Tue, 23 Aug 2022 03:52:54 +0000

Learning by experience: Students raise $1.25 million for Student-Managed Real Estate Fund Jennifer Anzaldi Mon, 08/22/2022 - 23:52

In This Story

Eric Maribojoc

While most students were taking a break from their studies this summer, the student managers of Patriot Real Estate Funds raised $1.25 million for the second student-managed real estate investment fund at ��AV.

The Center for Real Estate Entrepreneurship (CREE) at the School of Business established the initial student-managed real estate investment fund in 2018 to provide students of the Masters in Real Estate Development (MRED) program a unique experiential learning opportunity. With real money raised from outside investors, this is one of only a few similar programs offered at universities across the country, and allows students the chance to study, recommend, and manage investments in commercial real estate properties in the metropolitan Washington, D.C. area.

“The class is an education on the wide variety of risks and returns from different commercial real estate property types,” says Eric Maribojoc, the executive director of CREE. “The students have looked at apartment, office, retail, self-storage, and industrial deals. They learn investment and asset management skills. They have professional interactions with industry executives and professionals.”

The first fund, Patriot Real Estate Fund I, raised $750,000, and four years after launch, the 40 students who have gone through the program had fully invested the funds in ten properties, among them a

Hanna Picardi, MRED '22

medical office property in Gainesville, an apartment building under construction in Washington D.C., and an established shopping center in suburban Baltimore. This June, the current student managers raised the $1.25 million for a new fund, which will extend this experiential learning opportunity to the next generations of real estate students at Mason.

“The student fund has been one of my favorite experiences in the MRED program. Its real-world application is invaluable. It is an amazing educational tool and resume booster,” says Hanna Picardi, a recent graduate of the MRED program and one of this year’s fund managers. “I learned how to analyze a potential investment from A to Z, how to manage that investment over time, and how to determine if we’re getting paid for the risks we may take on. I learned not only from the professor, but also through my peers, through interviews with sponsors, through committee board members, and through visits to investment sites.”

Rod Alemi, MRED ’20

Rod Alemi, MRED ’20, agrees that the program’s educational benefits and impact on students’ careers is invaluable. “The student fund plays a vital role in cultivating up and coming real estate professionals going through the MRED program,” says Alemi. “It enhances the value of the MRED program by providing real world investment opportunities for students interested in pursuing the real estate investments and acquisitions career path.” After graduating from the MRED program, Alemi successfully moved from his job at a construction firm to a real estate investment company.

Tyler Kasak, MRED ’18

Tyler Kasak, MRED ’18, values the experiential learning opportunity. “The fact that we were dealing with real capital really forced us to be extremely thoughtful and thorough when looking at potential investment opportunities,” says Kasak. “Pitching a potential deal to the highly experienced investment committee taught me how to prepare and answer important questions. That experience was tough and a little nerve-wracking, but extremely rewarding. The experience had such a positive effect on me. I was pleased to hear about the second fund, which will continue to offer more students the amazing experience I was granted.”

For more information about the student-managed real estate investment fund, please contact Eric Maribojoc at rmariboj@gmu.edu .

Learn more about the Master's in Real Estate Development program here.

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