Tag Archives: Rice University

Q&A: Winning Business Plan for a Competition

How do you do a winning business plan for a business plan competition? I’m glad you asked. I’m a frequent judge of these competitions so it’s in my interest to help you improve your chances by developing a better business plan, pitch presentation, summary, and elevator speech.win the competition

So that you know, I’m answering this question with reference to the mainstream high-profile business plan competitions I’ve judged many times, including the University of Texas’ Global Venture Labs Investment Competition, the Rice Business Plan Competition, and the University of Oregon’s New Venture Competition. I’ve done these three at least 10 times each. I’m assuming they are typical – but I could be wrong.

Here’s how the process works, with regard to what you deliver and how decisions are made:

  1. You submit either a business plan or executive summary to a steering committee that selects a few dozen entrants from hundreds of submissions. These committees vary. Many still use the full plan, but trends favor just the summary. This step takes place behind the scenes, before the visible portion of the competition begins. The entries selected are called semi-finalists. They are invited to go to the competition, at the site, which usually involves a Thursday, Friday, and Saturday, most often in April or May.
  2. Semi-finalists are divided into groups of four to six. Semi-final judges, mostly angel investors, venture capitalists, and executives from sponsor companies, read and evaluate the full business plans before the competition starts.
  3. An elevator speech round happens on the Thursday, in the evening. The teams do a 60-second elevator speech for prizes and awards. Winning that competition doesn’t formally help win the main prize, but informally, it affects the judges who see it. About half the judges will attend that first evening.
  4. The semi-final round takes place on Friday. Teams do pitch presentations and answer questions from the judges assigned to their group, who have read their business plans. Judges choose a finalist based not on the quality of business as a potential investment. The plan matters of course, and the pitch matters as well, but the choice is ultimately about the business. Judges try to make decisions based on investment criteria, including growth potential, defensibility, scalability, and experience of the management team.
  5. Finalists go through the same gauntlet on Saturday. Finals judges read the plans, listen to pitches, and ask questions. They choose the winner based on the same criteria they use to choose investments.

In all of these competitions, the judges are told to choose the best plan for outside investors, not the best-written or most attractively formatted business plan. So, a mediocre business plan for a great business will always beat a great business plan for a mediocre business. What you want from your business plan is to present your business well in a way that makes it easy for judges to see what you have. Your business plan alone isn’t enough to determine your fate in these competitions, but it does provide the first impression and the detailed background. In fact, all three of the competitions I mentioned above have special prizes for the best business plan, but those awards pale in comparison to the main prizes.

Therefore, the best way to help your chances with your business plan is to make sure the judges see the critical elements that make a business attractive to investors: potential growth and scalability, proprietary technology or some other kind of barriers to entry, and an experienced management team.

Here are some related tips that might also help:

  1. Make sure you cover the information investors want. Tell a convincing story about the problem you solve and the solution you offer, in a way that will interest the investors and let them believe your market story. Show whatever traction you have, and as much startup experience in the management team as you can. Show how your business will defend itself (proprietary technology, trade secrets, whatever secret sauce you have) from competitors entering the market. Show how you can scale up for high growth. Show that you understand how exits might work in 3-5 years.
  2. Keep it brief. Be concise. Don’t show off your knowledge, push your main points forward. Bullet points are appreciated.
  3. Show your numbers and your key assumptions. Numbers without assumptions and underlying story are useless. Forget present value and IRR games that depend on future assumptions. Show unit economics and build forecasts bottom up, from assumptions, not ever as some small percentage of a big market.
  4. Use illustrations that simplify and explain. Have the detailed numbers to back them up, of course, but use bar charts and line charts and pie charts to help readers get the idea quickly.
  5. Check your numbers against real world benchmarks. Investors will react negatively, not positively, to unrealistic profitability projections.
  6. Maintain alignment between the key points you emphasize in the business plan, the pitch presentation, and the elevator speech. Ideally your business plan is like the screenplay for the pitch presentation and the elevator speech.
  7. Don’t be afraid to revise numbers constantly, and don’t apologize if the numbers you show today are different from what you showed yesterday. Plans are supposed to evolve constantly.

(Image: shutterstock.com)

From the Rice Million-Dollar Business Plan Competition

Today and tomorrow I’ll be judging the Rice Business Plan Competition again for the fifth time, enjoying the event thoroughly and proud to be a part of it. Rice Business Plan Contest

This one, now in its 11th year, has prize money totaling $1.3 million. Its also covered in Fortune Magazine and elsewhere, and rivals the University of Texas Venture Labs (formerly Moot Corp), the SuperBowl of business plan contests, in prestige. It’s a real coup for Rice University, Brad Burke, The Rice Alliance for Technology and Entrepreneurship (Brad is managing director), and Brad’s very-well-organized team.

At the kick-off elevator speech competition last night, Brad had some interesting numbers: in 10 years, after a humble beginning, the Rice contest has had 128 competing companies funded, for a total of $450 million.

That number highlights the evolution of these contests. What started at the University of Texas in 1984 as an academic exercise (hence the name “moot corp”) is now a launching pad. There are dozens of these contests every year now. Most of them have ties to MBA programs, and startups need to have at least one member enrolled in an MBA institution. The best of these contests attract very real startups with very real prospects. It used to be that a few were actually launched, and nowadays the majority are launched and funded.

Then, after we heard that number, we saw 42 teams present one-minute elevator speeches. They were timed, 60 seconds each. And there are some very impressive startups in that group. Today will be interesting.


Big Plans, Big Show, Rice’s Business Plan Contest

Jeff Mullins is a man with a mission. He says he was a patent attorney for seven years to get to know how that works. Then he went back to school, in the MBA program at Carnegie Mellon University, to focus on entrepreneurship. He’s now got the hottest startup I’ve seen in a while, Dynamics, the winner of the big prize at the Rice University Business Plan Contest.

And the big prize is pretty big. It’s hard to piece apart the package between cash and cash equivalents. There’s $20,000 in cash, $80,000 in free services, a $100,000 investment from Opportunity Houston (which is contingent on moving to Houston), and, certainly the real value jackpot, a $125,000 investment from the famed GOOSE Society of Texas. 

The GOOSE group — it stands for Grand Order of Successful Entrepreneurs — was formed by Rod Canion, Bob Brockman and four other very well known Texas entrepreneurship giants a few years ago, mainly to invest in the Rice contest winner. It now includes eight members. And past winners have ended up with more than just the investment money promised — mentorship, good advice, and deeper pockets.  They’ve supported past winners with a lot more than just the initial amount.

What Dynamix has is a market-ready credit-card technology that programs the magnetic stripe. It’s compatible with the 60 million existing card swipe readers out in the world, but still manages to manipulate what the stripe shows using buttons the owner pushes. And it’s just about the same size as the standard credit cards everybody now uses.

The flow of awards and prizes Saturday night took two hours (Brad Burke, Director of the Rice Alliance that puts on the show, and master of ceremonies, struggled in Oscar-Awards fashion to keep the talking short. Rumor has it that I was fingered as one of the offenders). Awards began with the $2,500 specialty awards like Palo Alto Software’s, which we give for the best written business plan, ( as in my post here last Friday) and mounted up through a NASA $20,000 life science Innovation Award and a $20,000 Dow Chemical Sustainability award. Total awards, including service equivalents and investment offers, totaled $805,000.  

These were very good plans in an excellent business plan contest. Several speakers cited the prize money to lay claim to the biggest and best. Although, in the fine print, the winner also gets a berth in next month’s Moot Corp contest at the University of Texas, which director Rob Adams will tell you is the “Super Bowl” of venture contests, started in 1984, the oldest or at least the most well known (I hate having to miss Moot Corp this year because of a scheduling problem).

As a judge, I struggled with the contest’s insistence on absolute rankings, without ties, because so many plans were so good. Rice got more than 340 entries, which it weeded down to 42 teams for last weekend. By the end of the finals, it seemed to me like most of the finalists were worthy of first place in any normal venture contest. For example:

  • NextRay, which took second place (and also won our best written plan award, and the NASA life sciences award), presented a new technology that may be able to replace X-rays with only one tenth of the radiation. From the University of North Carolina.
  • Tendix Development, representing Johns Hopkins Univeristy, showed the IRIS Engine, a new kind of internal combustion engine promising to deliver more power than what current engines with less than half the energy consumption. It has already won awards from NASA and ConocoPhillips.
  • Integrated Diagnostics, from the University of California at Berkeley, showed a quicker way to test blood for HIV.
  • Audiallo, from the University of Michigan, presented a new technology for processing sound, based on waves rather than digital, that hopes to offer way better clarity for hearing aids, and, later, bluetooth headphones and other uses. 
  • In Context Solutions, from the University of Chicago, showed a dazzling 3D store simulation able to perform fast in real time, targeting the high-end market research done for consumer packaged goods companies.
  • Authors of the open-source MODx content management system, a team including students from SMU, is building a company called Enterprise Theory to commercialize MODx support and services and tools, following a Red Hat model. This one, which had one of the best-looking business plans I’ve seen in a while, didn’t even make the finals.

So I’m flying back to Oregon now, as I write this, thinking that the Rice event has become a real winner. Lots of sponsors, lots of judges, and about 350 teams that were eventually paired down to 42. Great plans. I’m already looking forward to next year’s event.