Jump to Main Content
USA flagAn Official Website of the United States Government
Industry Word

Blogs.Industry Word

Register

Growing Importance of Business Plan Competitions

Comment Count:
4

Comments welcome on this page. See Rules of Conduct.

Growing Importance of Business Plan Competitions

By Tim Berry, Guest Blogger
Published: March 26, 2014

Are you aware of business plan competitions? If you’re an entrepreneur, they’re an excellent opportunity to present your business and compete for cash and in-kind prizes or, worst case, really good feedback from serious business people. If you’re lucky enough to be invited to judge, it’s a chance to spend a few days reviewing real-world startups.

I’ve been judging business plan competitions for almost 20 years. As I write this I’m looking forward to another season judging venture competitions including the University of Texas’ Venture Labs Investment Competition, the Rice University Business Plan Competition, and the University of Oregon New Venture Championship. Each of these three events pit grad-level business students from all over the world against each other as they compete for cash and in-kind prizes. They submit business plans, do business pitches and answer detailed questions.

I find judging these competitions fun, interesting and for me a great way to keep up with the evolution of high-level startups, business planning and entrepreneurship education.

The University of Texas started this, as far as I know, with the first “Moot Corp” in 1984. Moot Corp became Venture Labs Competition three years ago. It’s the oldest and possibly most prestigious – although Rice University is a serious rival. All of its entrants have won other business plan competitions to get to that one.

The Rice University contest is the richest. Recent winners have won cash prizes of hundreds of thousands of dollars and total prizes of more than $1 million including in-kind services (like free rent, consulting, legal work, etc.)

I’ve been judging the University of Oregon competition since 1997. I’ll never forget arriving on a Thursday morning to discover, to my horror, that I’d committed myself to all day Thursday, Friday and Saturday. My horror changed to real interest as the teams began their pitches. By Saturday I had enjoyed it so much I made sure to stay on the list for the future years. And I’ve missed only one year since then.

One obvious change I’ve seen in this area is the tremendous growth in the number of contests, the interest in contests, the prize money and the seriousness of the startups that enter.

The most important change is an amazing increase in the viability of the competing startups. The early Moot Corps were almost entirely hypothetical business plans developed by students as academic exercises. Nowadays most of the entrants in the major business plan competitions are real companies with real prospects. Of the three I judge, a clear majority of the startups that enter will eventually get financed and launch. Both Rice and Texas track angel investments and venture capital financing landed by former contestants in the hundreds of millions of dollars. Winners almost always have viable products, believable management teams, and credible growth prospects.

Another change is the length, style and content of the business plans submitted. Today’s business plans are much shorter than they used to be, as page limits have gone from 30-40 to 10-20. Judges have to read plans and they want shorter, sharper and more summarized. And – sadly, in my opinion – financial projections seem to be less rigorous.

Another development is that because of the continuing increase in interest, there is now a good website dedicated entirely to listing competitions, at www.bizplancompetitions.com. You’ll be amazed at how many events they list. And I hope you find one you can attend, enter or judge. If you have any interest in startups, it’s a great experience.

About the Author:

Tim Berry

Guest Blogger

Founder and Chairman of Palo Alto Software and bplans.com, on twitter as Timberry, blogging at timberry.bplans.com. His collected posts are at blog.timberry.com. Stanford MBA. Married 44 years, father of 5. Author of business plan software Business Plan Pro and www.liveplan.com and books including The Plan As You Go Business Plan, published by Entrepreneur Press, 2008.

Comments:

Agreed, and I'd add: don't be too proud to ask other people if they have tips for you, even if it's someone who came in ahead of you in a competition you were in. And take advantage of any mentorship that is involved and ask any questions - nothing's worse than being DQ'd because you didn't follow a rule...or knowing you could've done better had you just asked a few more questions of the coordinators. This is my company's second year in the University of Dayton's Business Plan Competition and we've definitely learned a lot from our first year and from talking to the mentors that have been made available to us.
Excuse me being a killjoy, but having been on all sides of business plan competitions also, I have found them a huge amount of work and overall quite disappointing for a number of reasons, to include, (1) I haven't figured out if this is witting or unwitting, but the winners every year tend to be in the what's hot category (e.g. biotech, cleantech, online apps) which suggests to me the best plan doesn't win but rather the competition is tilted towards the competition's external relevance, (2) I think there should always be a step included where the contestants critique each other and those critiques should be considered in the judging, since the winners too often seem to pass through with gaping questions/holes in their business models, (3) I acknowledge the huge amount of extra work this adds on the judge/organizer side, but no business plan competition should happen without written feedback, (4) a distinction should be made between student and adult competitions, where the students are not done the disservice of winning a competition and then losing out on going to get a real job that teaches them something and gives them the competence to win an adult business plan competition or even getting a real startup going, (5) although I acknowledge that this is a hard one to do otherwise, I think it's fundamentally flawed to make up the judging panel primarily with VCs and academic licensing folks because I think they are all operating in paradigms/business models which are self-reinforcing and largely calcified, where theirs jobs aren't about venturing but rather about taking as much venture out of the capital as they can, where me-too-ism is so rampant, and where there are few alternatives for their financing, and where their success rates are so low that it's objectively hard to ascribe success to skill rather than putting enough shots on goal while largely guessing, (6) the amount of prize money/services won typically is immaterial, (7) unless student competitions, comparative success statistics between the competitions should be kept on whether the winners become real companies, (8) frankly more competitions should have no winners, and (9) business competitions should try out huge ideas, not small ones.
Business plan always held a centre stage for every business, as this planning beforehand always helps one to succeed, that is why every organization tries to adopt the best business plan for the long run of the business.
Business plan competition is growing tougher. Every organization feels the need to satisfy customer needs and getting the best in lowest cost is not easy unless you can get there first.

Leave a Comment

You must be logged in to leave comments. If you already have an SBA.gov account, Log In to leave your comment.

New users, Register for a new account and join the conversation today!