Wisconsin Business competitions give fuel to start-ups – Governor’s contest is state’s latest effort to spur job growth

Wisconsin’s promising young technology companies hope to fill up on cash and connections, high-octane fuel for start-ups, at a new statewide business plan competition.

"It is all about company creation," said Tom Still, president of the Wisconsin Technology Council. "This is another way to spur technology transfer and company formation in Wisconsin."

Jason Gertzen
Milwaukee Journal Sentinel

Business plan contests elsewhere have proved to be more than mere academic exercises.

Over the past 15 years, more than 75 companies employing some 2,000 workers have spun out of the Massachusetts Institute of Technology’s $50K Entrepreneurship Competition. Companies competing in Pittsburgh’s EnterPrize competition raked in about $8 million in venture capital over the first four years of the event.

Wisconsin organizers of the Governor’s Business Plan Contest hope their initiative serves as a similar catalyst for entrepreneurial ventures.

The contest expects to offer prizes totaling more than $100,000, provide entrepreneurs with much-needed guidance and create connections that could attract critical investment backing to the developing companies. Contest organizers are still raising money and in-kind contributions, so prize details are not yet final.

"When you do a business plan competition, people actually start businesses based on the plans that they write," said Larry W. Cox, director of the Weinert Center for Entrepreneurship at the University of Wisconsin-Madison.

Precision Information, Fluent Systems and eMetagen are start-ups that received aboost by participating in a business plan competition at the university, he said.

Inspiring entrepreneurs

It may be that the best ideas would emerge and true entrepreneurs would launch these types of ventures anyway. But entrepreneurs are motivated to act by the incentives, assistance and deadlines of a contest.

"It gives you a structure to do the thing you really wanted to do anyway," Cox said.

The EnterPrize competition, organized by the Pittsburgh Technology Council, provided this sort of motivation for several entrepreneurs, said Olivia Wells, who ran the 2002 and 2003 contests.

"They said the biggest thing the competition did is that it helped them get their act together, get incorporated and get going," Wells said.

Gov. Jim Doyle and other state leaders regularly tout the importance of fostering an entrepreneurial culture in Wisconsin.

Wisconsin lags neighboring states and the national average in per-capita income. High growth, high-tech companies are considered a promising way to address this problem, especially as the battered manufacturing sector continues to decline.

Experts on the technology economy say it’s important to showcase a region’s risk-takers and innovators so as to inspire others. Business plan competitions can be an effective way to do that, Cox said.

"It creates a buzz," Cox said. "It creates an environment where people are thinking and talking about business plans, or business in general."

Good idea, poor plan

The Wisconsin competition will pair entrepreneurs who reach the later phases of the contest with venture capitalists or business experts who will serve as mentors.

Many of the business proposals could stand some professional buffing and polishing these mentors can provide, said John Byrnes, a veteran venture capitalist.

Too often, entrepreneurs come up with an intriguing innovation, then fail to flesh out how to build a business around it, said Byrnes, who is executive managing director of Mason Wells in Milwaukee.

Spelling out who would pay for a product is a critical component missing from many a plan brought to investors, Byrnes said.

"There is a big difference between technology, a product and a company," Byrnes said.

The region is ripe for the type of attention that the business plan contest will generate, he said. "There are a lot of good ideas," Byrnes said.

The top two or three business plans in the contest are likely candidates for venture capital backing, Byrnes said. Several others will have a good chance at attracting more informal sources of investment, such as money coming from wealthy individuals known as angel investors.

Companies not ready for immediate investment could make connections with investors and other key professionals who can help them once the business develops, he said. Other prizes provided by the competition might include office space, Internet services or professional services.

Meaningful mentorships

The process of the contest can be more valuable than the list of winners and prizes it produces, said Karen Freeman, who is helping with this year’s $50K competition in Massachusetts.

"Mentorship does make a difference," said Freeman, whose plan was a finalist in last year’s event.

Akamai Technologies Inc., for example, used its experience as a springboard to greater success.

"The most famous company we have coming out of the competition is Akamai Technologies, and they didn’t even win the competition," Freeman said.

The company, which produced technology that can make Web pages speedier and more reliable, was only a finalist in the business plan competition. Yet it reaped a prize of a different sort in 1999 when it made its debut on the Nasdaq Stock Market in a $234 million initial public offering.

Wisconsin already has business plan contests, such as the G. Steven Burrill Technology Business Plan Competition at the University of Wisconsin and the Kohler Center for Entrepreneurship Business Plan Competition at Marquette University.

The new Governor’s Business Plan Contest will build on those other events, said Still, the technology council president. The contest produced by the Technology Council will be open to students as well as others not affiliated with a university, Still said.

"We want to open it up to people who have never had a chance to enter such a contest," he said.

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