There Has to Be Another Way

1. Business Plan Competitions

Does anyone offer "free money" to start a business? Business-plan competitions come pretty close, typically featuring small pots of money, up to $50,000.

University-sponsored contests are popping up all over the country, with participants required to be current students, recent graduates or business-founding teams that include at least one university student. Winners of local university competitions also sometimes go on to national (and international) ones. For example, teams from around the world competed at the Moot Corp International Business Plan Competition at the University of Texas, Austin, described as "the granddaddy of business competitions." This year's contest featured 26 teams, including one each from licensed Moot Corp competitions in Africa, Asia, Australia and Canada. Contestants competed for a first-place prize of $15,000. Hewlett Packard also offered $100,000 in goods and services to one lucky team that agreed to launch an Internet company.

A number of municipalities have jumped on the business-plan-competition bandwagon to stimulate economic development. Probably the oldest such contest is sponsored by the Eau Claire Area Industrial Development Corp. in Wisconsin. Since 1986, the agency has invested $29,500 in companies.

Others who have followed the Eau Claire example include Amarillo, Texas; Carbondale, Illinois; Haverhill, Massachusetts' Cyber District; and Pittsburgh.

Hot Opportunities

Competitions associated with universities typically require that at least one member of the founding team be a current student or alumnus of the school.

  • Burton D. Morgan Entrepreneurial Competition (at Purdue University): more than $30,000 in cash prizes. Open to Purdue students and teams that include a Purdue student.
  • Harvard Business School Business Plan Contest is open to second-year business schools students and team including at least one second-year student. Awards include cash and in-kind services.
  • UC Berkeley has several contests--the Haas Social Venture Business Plan Competition and the UC Berkeley Business Plan Contest, open to students and alumni. The social venture contest offers a top prize of $10,000 to companies with a positive financial and social or environmental outcome. The regular contest in 2000 offered $50,000 for the winner.
  • MIT $50K Entrepreneurship Competition targets students and researchers in the MIT community. All teams must have at least one full-time MIT student as a principal contestant.
  • The Hummer Winblad February Madness Start-Up contest is open to individual or business teams where the founding management team is currently enrolled in a post-secondary college or university. The first-place winner will receive an offer of funding from Hummer Winblad. (415) 979-9600. (Lisa Anderson)
  • Babson College holds several competitions. The Douglass Foundation Entrepreneurial Prizes, for one, offers graduate students a total of $10,000 in awards ($6,000 to the winner, $3,000 for second place and $1,000 for third place). The John H. Muller Jr. Business Plan Prize Competition awards $5,000 to an undergraduate.
  • Indiana University conducts three competitions: The Indiana University Spirit of Enterprise Undergrad Business Plan Competition; the MBA Business Plan Competition, organized by the Kelley School of Business; and the invitation-only Indiana University Spirit of Enterprise MBA Business Plan Competition. The latter contest features the winning teams of local contests at nine Midwestern schools.
  • Enterprise Creation Competition sponsored by Ball State University in Muncie, Indiana, and Miami University in Oxford, Ohio offers more than $12,000 in cash prizes to teams of undergraduates from universities around the nation.
  • The inaugural Duke University Startup Challenge in 1999, operated in three phases, offered the winning team a $30,000 first prize. Teams must consist of at least one current Duke student, and mixers are held during the preliminary stages of the competition to facilitate team formation. For more information, call: (919) 660-7700.
  • Howard University holds a business-plan contest for students offering a cash prize during its annual Black is Business Week program. Applications are available in the fall. Call Dr. Saunders for details: (202) 806-1533.
  • NASDAQ/SDSU International Student Business Plan Competition sponsored by San Diego State University, Entrepreneurial Management Center. Open to faculty-sponsored full and part-time graduate and/or undergraduate students currently enrolled. (619) 594-2781.

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This article was originally published in the July 2000 print edition of Entrepreneur with the headline: There Has to Be Another Way.

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