Forget reality singing-show competitions. For the business-minded crowd, there's a growth of opportunity in college-based contests for aspiring entrepreneurs, hoping to catapult their budding ventures into the stratosphere.
"The connections and resources provided by the good ones [competitions] are tremendous," said Steven Kaplan, a professor at the University of Chicago's Booth School of Business. He founded the school's New Venture Challenge, which helps launch companies. Competitions "really help the participant build their business and increase the likelihood that the business succeeds," Kaplan said.
Many colleges are beefing up business pitch competitions for entrepreneurial students. These contests are vital opportunities to meet potential investors, gain exposure and develop relationships with mentors. Success stories include known brands such as GrubHub, the food ordering service. And some winning business ideas walk away with millions in funding.
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Mentoring is arguably the most important aspect of business competitions—even more so than the cash, Kaplan said. Apart from providing financial awards, the New Venture competition counsels roughly 25 finalists each year.
"They get introduced to mentors and to a network well before they ever pitch [their ideas]," he said. "So what we're doing is trying to match these companies with people who can help them and give them advice."
The New Venture Challenge, founded in 1996, awards up to $100,000 in cash and another $100,000 in services such as legal help to top entrants.
Win or lose, competitors often "leave with pockets full of business cards," said Mary Lynn Fernau, a spokeswoman for Rice University, which sponsors its own pitch competition.
GrubHub and Braintree, the payments platform, are among the New Venture Challenge's notable recent winners.
"The New Venture Challenge and these other competitions help to prepare companies for real-life next steps in terms of building viable businesses," said Abby Hunt, a GrubHub spokeswoman.
Since winning the competition in 2006, GrubHub has raised five rounds of funding and more than $84 million in financing, Hunt said.
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The 'Super Bowl' of Competitions
A key annual business contest is the Rice Business Plan Competition (RBPC) at Rice University in Houston. Described by Fortune magazine as the "Super Bowl" of all business competitions, RBPC began in 2001 with nine teams competing for $10,000 in prizes. This year, the contest awarded more than $1.5 million to several fledgling companies chosen from hundreds of proposals. (Fortune is an RBPC sponsor.)
SiNode Systems, a six-employee battery materials company, won this year's prize, taking home close to $1 million.
The RBPC competition was "truly transformative," said Samir Mayekar, executive director of SiNode. "The financing commitments from [the competition] will help us grow our team and accelerate development and commercialization of our anodes for lithium-ion batteries," he said.
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Of the more than 300 judges that participate in RBPC, more than half are investors in start-ups and looking for the next, great emerging company. Of the 395 teams that have placed in RBPC since its inception, more than 56 percent have "launched"—meaning "they actually formed a corporation and moved the business forward," said Fernau of Rice University. Of those that have launched, 62 percent remain in business.
Business contests overall promote innovation, and, simply put, reward great ideas.
MouseHouse, for example, won the New Venture Challenge's $30,000 prize last year. MouseHouse is refining an app and web platform that streamlines the traditional way researchers collect and share information on lab experiments.
"New Venture Challenge gives us credibility when we go to market and actually try to sell to these labs," said MouseHouse CEO and Co-Founder Imran Ahmad.
And creative, emerging businesses create a ripple effect.
"It's great these competitions are encouraging young companies around the country—and really around the world," said Kaplan of the New Venture Challenge. "That leads to innovation, and innovation leads to a more productive and vibrant economy."