Planning for gold: at business plan competitions across the country, judges sift through talented teams of presenters to find out who deserves the precious prizes—cash, services and VC exposure. Could your startup be the next to strike it rich?

Entrepreneur, Nov, 2004 by Nichole L. Torres

There's an air of optimism about a business plan competition. Teams bustle along, rehearsing theft business plan presentations before delivering them to illustrious judges who not only have business acumen, but are also often connected to large VC finns. Permeating every conversation is a we-can-do-it attitude. Business ideas can range from the highly technical biomedical industry to the more ethereal creative arts arena. Yes, the competition part of it can be nerve-wracking, and the judges are not what one would call an easT audience. Still, it's a great opportunity to win cash and prizes for your business and get pitch time in front of actual VCs--and it's also a huge learning experience from start to finish. It may very well be in the drinking water at a business plan competition, but the general attitude is this: No matter what happens, we'll build a business.

The good news is that these hotbeds of entrepreneurial inspiration are taking place at more venues across the country (and the world, in fact). A large percentage of business plan competitions are associated with university MBA programs, note experts, but a fair number are also produced by communities, open to anyone in the local area or to businesses of a certain type to encourage economic growth. "There are definitely more open competitions," says Mark Cannice, director of the university of San Francisco (USF) Entrepreneurship Program. "As the word spreads about allowing [people] the opportunity to develop a complete business concept and offer it to professional investors and executives, I think that experience has been so powerful and fruitful for so many ... I think the demand for most universities to have [competitions] seems to be increasing as well."

To successfully enter the business plan competition fray, know these caveats: Decide if you can enter a university-sponsored one (usually, someone in your management team is required to be an MBA or a graduate student). If your team has no MBAs, you might be able to enter a community or corporate competition with many of the same benefits.

The real test, though, is the future success of business plan competition winners. Do they make it past the startup stage to fulfill their competition-era promise? For Chad Joshi, winner of the WPI Venture Forum Business Plan Contest in Worcester, Massachusetts, in 2000, the potential that judges saw in his business has certainly been fulfilled. The WPI contest, affiliated with the Worcester Polytechnic Institute, is open to any technology-based startup or pre-startup in New England. Joshi, founder of Energen Inc., began laying the groundwork for his company in 1996. The Lowell, Massachusetts-based company manufactures precise motion control products often used in scientific research and optical equipment.

Still in the R&D stage of his business, he first entered the competition in 1998 and came in third. "It was a good learning experience," says Joshi, 46. "I got to meet with the people that reviewed my business plan." Getting valuable feedback he entered again in 2000 and won that year's first prize: $10,000 ($5,000 in cash and $5,000 in services from various sponsors).

It was just the boon his company needed. "Certainly, it got the attention of the VC community," notes Joshi. "They were much more interested in hearing our story and what we wanted to do." The connections he made through the contest were invaluable, too, as many of his contacts ended up offering good business advice and mentoring his company through its early growth. Today, projecting sales between $1.5 million and $1.7 million, Joshi reflects on what a positive experience a business plan competition provides for aspiring entrepreneurs. "It's a very good way for new people to learn about building a business," he says. "If I had a different business that I was looking to get off the ground, it would be a great way to get exposure."

Competition 101

The exposure and connections within the business community that business plan competitions provide are the primary draws, says Cannice, director of the USF International Business Plan Competition. Started in 2000 as a competition only for USF students, it later expanded to include national and international teams. Requiring at least one member of the team to be a graduate student, the competition offers $25,000 worth of prizes ($10,000 for first place and smaller increments for second, third and so on).

Because of its location in San Francisco, a main draw for the USF contest is the opportunity to present plans to the high-tech VCs who often serve as judges. "Each contest has its own flavor," Cannice says. "The biggest draw is not so much the money, but a once-in-a-lifetime opportunity to pitch their plans to VCs from silicon Valley ... to get the exposure in one weekend that most entrepreneurs will never get in a lifetime."

Though sponsored by a university, the business plan competition is not just an academic exercise by any means. "Most of [our early finalists] are trying to raise money and build a business--the 2004 winner from Wharton [MicroMRI] has just raised half a million dollars in seed capital," says Cannice.