The Cornhusker State has recently adopted business plan competitions as a key component in its economic development strategy. If it proves successful, Nebraska’s approach may be a model for a few other states to follow as a way to support entrepreneurs and attract new businesses.
Invest Nebraska, a 501(c)(3) venture development organization received a grant from the Nebraska Department of Economic Development in 2008 to organize and host a series of competitions across the state. To date, there are five such competitions: Northeast Nebraska, Southeast Nebraska, Western Nebraska, City of York, and City of McCook.
(The McCook competition is titled the Hormel Business Plan Competition as it takes over for a similar event started by the Hormel Family Foundation in 2007.)
In addition, Invest Nebraska runs the statewide “East 2 West Venture Competition” which invites entries from new businesses located in Nebraska or willing to relocate to Nebraska. This year’s competition takes place on November 19 with an entry deadline of November 8, 2010.
The grand prize in each of these competitions is not a cash grant, but rather an equity investment from Invest Nebraska. The amount of the investment is currently set at $50,000 for the statewide competition and ranges from $20-30,000 in each of the regional competitions.
According to Dan Hoffman, Executive Director of Invest Nebraska, the reason for structuring the prize as a minority investment is to ensure that the winning business continues to take advantage of operational assistance and other resources available from Invest Nebraska, as well as to keep the founders focused, thus increasing their chances for success. Hoffman says that Invest Nebraska has made six investments to date, although none have yet returned money to investors.
Of particular interest is the fact that in the York Venture Competition coming up in December a local investor club will participate in the equity investment prize on the same terms as Invest Nebraska.
You can find more information about this initiative at InvestNebraska.com.
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