May 1, 2003
Business plan competition moves to final round
Students aspiring to secure seed money to nurture future ventures showcased their brightest ideas last week during the investment round of the UW Business School’s Center for Technology Entrepreneurship (CTE) Business Plan Competition. A total of 30 teams from local universities pitched their concepts to a bevy of investment bankers, entrepreneurs, lawyers, and venture capitalists acting as judges and armed with faux dollars to invest.
The competition’s 130 judges were each given $1,000 in “CTE dollars” to invest in the most viable ideas. By the end of the evening, about half the teams were eliminated, allowing the 16 teams who accumulated the most faux money to advance to the final round for a chance to win the genuine $25,000 grand prize.
With $80,000 to be distributed in such categories as best ideas in high growth, lifestyle and social enterprise, the competition awards one of the largest amount in seed funding of any similar event in the country.
“About half of the ideas presented this year involve technology-driven businesses while the remaining business plans represent brick-and-mortar start-ups,” said Suresh Kotha, faculty director of CTE. “Our competition is a microcosm of the local economy and the return to traditional business models by would-be CEOs indicates the prevailing desire to go back to basics,” he said.
Some of those homespun ideas include a disco club, a salon for curly-coiffed women only, and microwaveable coffee beans. Judges decided which companies made the grade based on a variety of criteria.
“What I look for in a business is viability, degree of risk, and credibility of the management team to pull it off,” said Nancy Pryor, chief financial operator of NetReflector and investment round judge. “What’s also important to me is that they’ve taken the time to think about their business to plan out a credible financial forecast. New and unique ideas that are out of the box and that fill a need are really interesting to me.”
For Troy Hartzell, a UW alumnus and investment round judge, the investment round portion of the competition was especially near to his heart. Hartzell says that as a result of the contacts made at the business plan competition in 1999, he and a group of college friends successfully raised $2 million in venture financing and founded allstudents.com, which later became a dot-bomb.
“I look for teams that have talked to their customers about their products, know what the buyer likes, wants, needs, how much it is worth to them, and how long it will take to get the purchase order,” said Hartzell, who now works in investment banking.
Those qualities evidently percolated in Coffee Technologies, which has secured a spot in the contest’s top 16 companies and will move on to the finals. Coffee Technologies holds the exclusive worldwide license for a patented process that allows consumers to easily fresh roast coffee beans in an ordinary microwave oven. Bryan Kean, the would-be company’s CEO, says he can’t imagine not making changes to the plan based on the information judges shared with him during the investment round.
“The marketing section is going to get reworked significantly and we’ll also be rewriting the finance section so that the data flows more clearly and more information and detail is provided,” he said. “A business plan is very much a living document that grows and changes as information and ideas continue to evolve and come together.”
Kean and other competitors will face more extensive scrutiny in the contest’s upcoming long presentation round from judges like Bill McAleer, co-founder and managing director of Voyager Capital, a Seattle venture capital firm. McAleer has been a judge since the competition’s inception and says while the quality of the management team and a sound business model are key features in start-up companies he invests in, he also considers other criteria.
“Fundamentally I look for an idea that will resonate with a customer and has excellent market potential. If it passes that criterion, then I look at the company’s distribution channels and the uniqueness of the idea,” said McAleer.
“What sparks my interest the most is when the entrepreneur has a unique idea with excellent market potential and that the team is passionate about what they can do for customers and are excited about doing something with the business concept. With the students, I also look for them to show me that they have worked on the idea together and that they share a common enthusiasm for the plan they are presenting,” he said.
The 16 finalists will move on to the competition’s long presentation round Tuesday, May 20. Of those 16, four teams will advance to the competition’s finals later that afternoon.
The other finalists are: ARVI, creators of scaleable, surface-crawling robots; Atomic, a proposed disco club near Gonzaga University; Brass Media, a publishing company; Cascade Link, providers of wireless Internet service for marinas; CyberSpeed Technologies, makers of rear-vision safety for motorcycles; Drishtee, technology providers for rural areas; Global Foods, makers of gluten-free foods; International Healthcare Connections, providers of medical care in developing countries; Kotis Designs, creators of custom t-shirts for university Greek systems; MicroGREEN Polymers, designers of biodegradable food packaging; Mobile Bigfoot, providers of wireless broadband for residential areas; NanoString Technologies, furthering advances in genomic discovery; PayMobile, makers of cellular parking meter technology; P. Munson & Co., providers of personalized bath and beauty products; and Tranquil Technologies, producers of noise reduction technology for automobiles
The competition includes students from Gonzaga University, Seattle University, Seattle Pacific University and the UW.
