BizPlanCompetitions

A tale of two business plan competitions

Here we compare two business plan competitions — MassChallenge and New Ideas SC — to illustrate just how different the approaches taken by state-supported contests can be.

By way of background, MassChallenge is currently holding its inaugural competition. It is operated by a newly-organized nonprofit organization and is supported by the Governor of Massachusetts, the Commonwealth’s Secretary of Housing and Economic Development, and the Mayor of Boston, among many other sponsors.

New Ideas SC is hosted by FastTracSC, a coalition representing many of South Carolina’s universities and economic development agencies. It is also supported by a number of other state and local organizations, including SC Launch. This year marks its sixth annual competition.

No big differences thus far. But consider the particulars:

Prizes: MassChallenge is planning to dole out $1 million in cash to its winners, with 15-20 prizes of $50K-100K. New Ideas SC will be spreading $20,000 among 5 category winners and 5 runners-up, including a $5,000 grand prize. Both competitions provide non-cash prizes as well.

Eligibility: MassChallenge is open to essentially anyone in the world, as long as they are willing to participate in certain required activities in Massachusetts during the competition. There is no obligation to set up business in the Commonwealth, although the organizers “believe that Massachusetts is the world’s strongest innovation ecosystem and that winners will want to stay.” New Ideas SC requires that participants be South Carolina residents with ideas that bring “new jobs, new energy, new talents, new life and new wealth to South Carolina.”

Branding: MassChallenge bills itself as the “world’s largest start-up competition.” Quite a bold claim, but supported by its large number of entrants (over 400 teams), of which about 300 were selected for the semi-finals, with 100 to proceed to the accelerator stage/finals. New Ideas SC makes no such claims as it remains state-centric, but still manages to attract an impressive number of entries (over 300 in 2009).

Time commitment: Participating in MassChallenge is a very involved process. The competition spans 6 months, includes three rounds of judging (including two live presentations) and encourages participants to seek out endorsements that factor into their point totals. Finalists are assigned mentors and must go through an “accelerator” stage. New Ideas SC is incredibly simple. One online application and that’s it. No business plans, no presentations. Winners are selected by judges based solely on their idea submissions, except the “wildcard” category winner is determined by public vote.

Cost: MassChallenge charges an entry fee of $195 to $295 to ensure “serious” entries. New Ideas SC charges nothing to participate.

We look forward to the success of both MassChallenge and New Ideas SC and hope these competitions work to generate new business growth in both states. (Apparently they can use a little help, as Forbes.com recently placed Massachusetts 40th in business growth prospects and South Carolina 30th.)

Photo credit: sarahmichael

Joe Hurley is a CPA, author of "The Best Way to Save for College - A Complete Guide to 529 Plans", founder of Savingforcollege.com, and co-founder of Bizplancompetitions.com. He has also recently started making maple syrup.