When it began in 2001, the Rice Business Plan Competition was like most other business plan competitions. It was a class project for MBA students. Ten competitors vied for 10-thousand dollars in prize money. It has grown into something completely different.
“In the early years maybe it was an academic exercise or an academic exercise. I mean these students were writing a business plan because they were getting course credit, but that is no longer the case. The teams that present now are very serious about launching their businesses and they’re here to raise money and make contacts.”
That’s Brad Burke the managing director of the Rice Alliance for Technology and Entrepreneurship. He said the recently concluded 2009 version began with well over 300 business plan submissions.
“And we have a screening board of people who evaluate those and try to select the 42 best, in terms of the best investment opportunity.”
This year there was 800-thousand dollars in prize money with the winner getting 125-thousand. Burke says all of the final 42 companies take home money, but they get even more than that over the course of the competition.
“It’s also the opportunity to present your plan in front of over 200 venture capitalist and other individuals who can help them launch their business.”
That’s because some of the judges are venture capitalist themselves who, in addition to awarding prize money, often invest their own capital in projects they think are worthy.
One such judge is Blair Garou of the venture capital firm of DFJ Mercury.
“We want to find something very novel, that’s patentable, that can be taken to market very quickly and for not a lot of money. And I think this year especially given the recessionary environment a lot of the judges looked at these opportunities and said ‘what would make sense now?'”
Justin Cross is an MBA student from the University of North Carolina. His company, Next Ray produced an imaging technology that has better quality and less than one-percent the radiation dosage of x-rays. It won the 100-thousand dollar second prize.
He says the investment money is a boost and the feedback makes you sharper.
“Real tough questions which required you to go back and adapt and change your plans and try to explain your business idea better and move forward and just get people interested in creative buzz.”
Rice’s Brad Burke says the investments and the critical feedback have paid off for in a big way for competitors for past competitors.
“We’ve had over 80 companies launch their business after competing at Rice and they’ve raised over a 145-million dollars in early stage funding.”
Burke says the support of local venture capitalists is the reason the Rice Business Plan Competition has continued to grow and attract competitors from around the world.