College entrepreneurs in Indiana are sharpening their business plans and practicing their pitches in hopes of convincing experts-the possibly funders-that they've come up with the next big idea.
The venue: the increasingly highstakes competitions that universities here and elsewhere sponsor to give them practice selling themselves and their ideas. Success can come with more than bragging rights, since judges often include venture capitalists who can help transform finalists' dreams into reality.
"I can't imagine a better way to train for the business world and the real world," said Larry Cox, director of Ball State University's Entrepreneurship Center. "You're out there making a pitch and there's money on the line."
The contests have proliferated in recent years, ranging from state-sponsored competitions where entrepreneurs can land big-bucks deals to student-only challenges that center more on honing the business pitch.
In fact, there are so many competitions that some schools set up teams to crisscross the nation and Canada, selling their ideas. Certain wins can qualify teams for the self-named "Super Bowl of World Business Plan Competitions"-the Moot Corp. contest at the University of Texas at Austin. There, global champions win $25,000 in cash and up to $75,000 in donated services.
For most competitions, students take a business idea, research it, write a business plan and then make a pitch to a panel of judges. Winners usually take home a cash prize. Many of the larger competitions include elimination rounds.
Racing to a win
Ball State has hosted traditional business-plan contests for at least a decade, but last year changed the format to give it more of a Hoosier flavor.
In its Nascent 500 Business Plan Challenge, scheduled for March 28, 12 teams of undergraduate students pitched their ideas to judges while riding in the back of a limousine as it did a lap around the Indianapolis Motor Speedway. The winning team got $10,000 and a ride in a race car.
Results were not available by IBJ deadline, but only one Indiana-based team was competing. BSU student Matt Bare had high hopes for his Web-based business, which allows customers to send mailorder worm excrement to people who have irked them. (See story, right.)
"Placing in these competitions helps because it adds credibility," said Bare, who won top honors at two other Indianabased contests. "And it's helped perfect my pitch."
But Bare had stiff competition, including the early favorite: a team out of the University of Manitoba in Winnipeg, Canada. The school has a tradition of fielding strong business-plan teams and has logged five wins in six trips to the Ball State competition. This year's University of Manitoba team is proposing a technology that extends the viability of organs harvested for transplant.
In fact, University of Manitoba's success in competitions has become part of its business program's draw. Its Asper Centre for Entrepreneurship partners with a college in Israel that has a strong science bent. Manitoba students get product ideas from Israel, often incorporating the technology into pitches to bring them to the U.S. and Canadian market.
This year, Manitoba has four teams, each going to three competitions. Director Robert Warren said the contests often match his students with investors, who either judge the contests or scout for funding opportunities from the audience. With their help, his teams have launched 22 companies since 1995.
Recently, a group of his students went to a contest hosted by Carnegie Mellon University in Pittsburgh and returned to Canada weighing three financing offers for its company, Civitech, which makes a sensor system to detect moisture levels in building materials.
"Until students go through the competitions, they don't know what it takes to sell an idea," he said.
From winner to business beginner
Purdue University hosts a slew of competitions, some for existing companies and others limited to students. The university decided to limit two of its competitions to entries by Purdue students in hopes of growing their ideas into locally based companies.
The Burton D. Morgan Entrepreneurial Competition is one of the nation's oldest. Started in 1987, it has a more academic bent than the fast-paced contests, focusing on the written business plan and only culminating in an in-person presentation after several elimination rounds.
Past winners include several companies now housed at the university's business incubator park in West Lafayette.
One of them, M4 Sciences LLC, included participation in the contest as part of its startup plans, CEO James Mann said. Founded in 2005, the company makes technology for precision manufacturing processes.
As a startup, the company lined up a grant from the National Science Foundation, with a smaller matching grant from Indiana's 21st Century Fund. But winning the 2007 Burton D. Morgan Entrepreneurial Competition triggered a second, much larger state grant and brought other private investors on board.
"There's a lot of added visibility with a win," Mann said. "All kinds of opportunities followed the win."
Purdue chemistry professor Dan Raftery's team won second at both the 2007 Morgan competition and this year's nationwide life sciences competition, also at Purdue. His company, MatrixBio LLC, developed a chemical process that is being tested as a diagnostic tool for certain cancers.
"The 2007 win helped us with some needed publicity about what we were doing," Raftery said, leading to talks with several investors. Then the 2008 win showed them the company "could compete on a larger scale with more established companies."
Purdue also hosts a less-formal elevator pitch competition that's in its second year. Participants get two minutes to sell their businesses and can win up to $1,000.
The short format teaches participants to communicate clearly and find a way to leave others wanting to learn more, said Nathalie Duval-Couetil, director of Purdue's certificate program in entrepreneurship and innovation.
Those are useful skills, whether a student goes on to start a business or works in a corporate setting where he might wander into the conference room early for a meeting and find himself alone with the boss.
"It's the same skills-you have to pitch yourself and what you've been doing," she said.
At Indiana University, students practice pitches in classes and travel to compete in contests.
"Rarely do students have as challenging of an experience" in a classroom, said Donald F. Kuratko, chairman of IU's Johnson Center for Entrepreneurship & Innovation.
Kuratko, who joined IU four years ago after two decades at Ball State, said he has considered starting a business competition in Bloomington but decided against it.
"There are so many business plan competitions right now. There's so much money floating out there already," he said. "I'm more interested in preparing my students here to go out there and win."