Venture competitions, also known as business plan competitions, have proliferated at universities worldwide since their inception by a group of MBA students at the University of Texas in 1984. They allow students (including recent alumni) and often staff to submit an early-stage business idea with a chance to win both financial and non-financial support to help take the idea forward. They are useful not only for those who want to commercialise their own research but also for MBAs and other business students who want to have entrepreneurial careers after graduation.
These competitions offer a great opportunity to road-test your business idea and practice your pitch in explaining its benefits to non-experts. The chance to win competition money is also a clear selling point – while you are likely to be asked to show that you are spending it on the business, competitions don’t take any equity, nor will any repayment be expected.
Many competitions follow a similar format. This often involves the initial submission of a written business plan, with those shortlisted then presenting their pitches to a panel of judges. It is accepted that your business will be at a very early stage – perhaps will not even have advanced off the drawing board yet – but you will need a clear idea and be able to articulate why it is better/different than those you are up against.
Specifically, the judges will want to know about the business opportunity and your USP. They will also be looking for information on the relevant market size and what is driving that market. Do you currently have or expect to get any intellectual property (IP) protection? Who are the founding team and what are their skills? In addition, judges often ask for some basic financial predictions, an outline of any risks you have identified that you will need to be aware of and your thoughts on the business’ potential for scaling up.
It is also good to talk through how winning the competition might make a difference to your business idea and what you would spend the money on. Competitions often emphasise finding solutions to real-world problems and can have several categories, such as those relating to environmental ideas and social ventures. The good news is that once you’ve perfected your application for one competition, you can use this as a basis to enter the many other competitions that are out there.
The financial prizes on offer from venture competitions are generally between £5,000-50,000 GBP in startup funding. Even relatively small amounts can help take your idea forward and help you complete a milestone that might unlock further funding from other organisations – you might file a patent, complete a professional market report, or create a prototype that can be physically (or digitally) put into the hands of early adopters to get some early customer feedback. Crucially, winning a competition also gives other investors confidence now that your idea has been assessed and approved by a panel of experts.
However, winning a competition provides many more benefits than simply the money. They provide a reference point for anyone looking up your background and, often, a starting point in your business’ history. Indeed, companies such as Innocent and Dyson have publicised their “backstory” as a way of generating empathy for the business. The in-kind support on offer from venture competitions can be just as useful. This might include access to a physical space, such as an incubator, where you can work and meet clients, access to IP lawyers for help with filing IP, free banking, access to mentors, or access to a network, such as a virtual incubator or accelerator where you might find potential collaborators or customers.
Most universities and business schools run a venture competition in some form. The Rice University competition, for example, has been running for more than 20 years and has a total of $2 million in prizes annually. Companies that have emerged from this competition include Owlet and Hyliion and more than 250 others that are still active and have gone on to raise many millions in further funding.
In the UK, the University of Manchester Venture Further Competition has produced several businesses, such as Urban Chain, which uses blockchain to lower customers’ energy bills by buying energy from the local energy market and Mishipay, which provides ‘scan and go’ technology for retail.
It’s worth noting that business plan competitions are also run by other organisations as well as universities. Shell Livewire, aimed at those aged between 18 and 30, has supported nearly 700 businesses since its launch in 1982. The Tata NACUE Varsity Pitch is open to all students in the UK – last year’s winners of its top prize of £15k GBP was Drill Surgeries, which uses AI to help perform more precise surgery. The Deutsche Bank Awards for Creative Entrepreneurs (DBACE), meanwhile, gives access to an incubator focused on the creative industries as well as offering a top prize of £15k GBP.
Judging can be subjective so don’t be disheartened if the feedback you receive from a competition is negative or seems to miss the point of your idea – even professional investors get it wrong sometimes. It’s important to remember that these competitions are aimed at developing skills as much as creating new ventures and that they also encourage you to build a network with those who could then form part of your application to future competitions. Ultimately, even if your idea doesn’t take off, the skills and experiences acquired will look great on your CV and you will probably have had a fun time in the process.
Headline image credit: eberhard grossgasteiger on Unsplash
Robert A Phillips is a senior lecturer in entrepreneurship at Alliance Manchester Business School, University of Manchester.
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