A look at the world’s largest business plan competition: Rice University
When the Rice University Business Plan Competition started in 2001, nine teams competed for $10,000 in prize money. Last academic year, the 10th anniversary competition gave away more than $1.3 million in cash, equity and other prizes, making it the world’s richest and largest business plan competition, according to Lea Aden Lueck, the director of the competition.
“For 2012, we’ll have 42 teams competing for prizes totaling around $1.4 million,” she says. While the exact prizes and amounts haven’t yet been finalized, Lueck expects the prize money to equal or exceed last year’s competition, which offered more than $1.3 million in prizes.
The competition is hosted and run by the Rice Alliance for Technology and Entrepreneurship, Rice University’s flagship initiative devoted to the support of entrepreneurship. The Rice Alliance is a joint venture between three Rice University graduate schools: the Jones Graduate School of Business, the Wiess School of Natural Sciences and the Brown School of Engineering.
To run a competition of this size is no small endeavor, It includes the original business plan competition, separate prizes for Clean Energy, Life Sciences, Technology and Nanotechnology, Women Business Plan Prize, elevator pitch and company showcase.
Between 2010 and 2011, applications grew 25 percent. Lueck and her staff culled the applicant pool of 510 teams down to 42 teams. Every one of those teams wins a prize, with the minimum prize being $500.
With the growth in the number of teams and prizes, there has been a corresponding growth in the number of judges. Last year, the competition featured 250 judges and more than 100 sponsors.
The bulk of the large prizes are in the form of convertible notes so that the prize winners receive an equity investment in their firms on terms “very favorable to the company” says Lueck. That fits in with the objective of the competition, which is to encourage students to form companies and become entrepreneurs.
Lueck is very proud of the track record of competition participants: since the competition started, 133 past competitors have successfully launched businesses, raising in excess of $396 million in funding. These companies employ more than 500 people.
“We are looking for teams that have ideas for companies that they plan to launch and that will be successful,” she says. “Our main instruction to our judges is to choose the company you would invest your own money in.”
In the past, the most successful teams are those with an interdisciplinary focus. “We love to see interdisciplinary teams from engineering and the sciences. Those tend to be the most successful teams,” she says.
Because of the large scope of the competition and the variety of prizes and tracks, it’s an incredibly complex venture to organize and run. The competition pretty much takes over the Jones School building during the week of the competition.
Last year was the first year that the competition partnered with iStart, the Kauffman Foundation’s business plan competition platform. Lueck notes that the automation in the process of dealing with applicants and judges offered by iStart has really helped make her job easier. They plan to use iStart again this year.
Photo credit: Rice University
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