Forum for Science, Industry and Business

Sponsored by:     3M 
Search our Site:

 

Business plan competitions may be key to job growth

21.09.2012
A new study of high-tech startups that participated in the Rice Business Plan Competition (RBPC) shows that these entrepreneurs have a much higher rate of success than typical new ventures and are therefore more likely to contribute to job growth.

The study by the Rice Alliance for Technology and Entrepreneurship spans the 11-year life of the RBPC, the world's richest and largest business plan competition, which comprises teams of graduate students from throughout the world. The comprehensive and longitudinal study offers insights into the experiential factors that can help entrepreneurs launch a successful business.

Using data on the 354 RBPC graduate-student competition teams from 2001 to 2011, the study found:

199 (56 percent) went on to launch their companies after competing at the Rice competition.
128 of those (or 64 percent) are successful and still in business today. (Typically, only 20-50 percent of startups survive to their fifth anniversary.)
Past competitors have raised more than $460 million in early stage funding.
A conservative estimate of jobs created tops 1,000.
According to the Kauffman Foundation, in the past 30 years, all net job creation in the U.S. has taken place in firms less than five years old, and this is consistent with the experience at the Rice Business Plan Competition. The Kauffman Foundation is a private, nonpartisan foundation that works to harness the power of entrepreneurship and innovation to grow economies and improve human welfare.

"The study shows that university business plan competitions can go beyond simply being an academic exercise or educational experience," said Brad Burke, managing director of the Rice Alliance. "They can serve as a vehicle for building a robust entrepreneurial ecosystem and as a launching pad for new businesses, especially high-tech, high-growth startups."

"The Rice Business Plan Competition's track record is unparalleled in creating new, successful high-tech startups," said Kauffman Foundation Vice President Lesa Mitchell. "The competition provides access to venture capital and other early stage investors, strategic partners, mentors and service providers – not to mention more than $1 million in seed funding and other prizes – all critical resources for successfully launching a new company and creating jobs."

The study showed that as a result of the quality of the competitors and this access to investors, 25 percent of the successful startups from the competition have raised venture capital funding compared with less than 1 percent of startups that typically get venture capital funding. Of the total $460 million in funding raised, 62 percent came from venture funding, 13 percent from angel investors and 13 percent from government grants.

The RBPC results have shown to be a good predictor of a company's success, based on the winners and teams that reached the finals. All of the winners in the RBPC from 2004 to 2011 have been successful, are still in business and have raised more than $107 million in funding (with the exception of one team that decided to pursue other avenues to commercialize its technology). Of all the teams that reached the finals from 2001 to 2011, 56 percent have been successful and have raised more than $269 million in funding.

Teams that compete at the RBPC present their ventures to more than 250 venture capitalists, angel investors, corporate investors, mentors, successful entrepreneurs and other leaders from the business community, where they have a chance to get mentoring, feedback, capital and connections.

Entry into the Rice competition has become more competitive each year, and in 2012, less than 3 percent of the 1,600 applicants were accepted. The states with the largest number of competitors during the first 11 years were Texas, California, Illinois, Massachusetts and Georgia.

The universities with the largest number of teams accepted to compete at the RBPC include Rice University, Massachusetts Institute of Technology, University of Texas at Austin, University of Michigan, Johns Hopkins University, University of Arkansas, Carnegie Mellon University, University of Chicago, Southern Methodist University, University of Illinois at Chicago, Georgia Institute of Technology, Northwestern University, Duke University and Stanford University.

The study shows that the Rice Business Plan Competition provides a model that other organizations can follow to support entrepreneurs who, in return, will create jobs and build economic prosperity in the U.S.

For a complete copy of the study, go to http://www.alliance.rice.edu/uploadedFiles/RBPC/2012_RBPC_ImpactReport.pdf

David Ruth | EurekAlert!
Further information:
http://www.rice.edu

More articles from Business and Finance:

nachricht Mathematical confirmation: Rewiring financial networks reduces systemic risk
22.06.2017 | International Institute for Applied Systems Analysis (IIASA)

nachricht Frugal Innovations: when less is more
19.04.2017 | Fraunhofer-Institut für Arbeitswirtschaft und Organisation IAO

All articles from Business and Finance >>>

The most recent press releases about innovation >>>

Die letzten 5 Focus-News des innovations-reports im Überblick:

Im Focus: Ultrafast snapshots of relaxing electrons in solids

Using ultrafast flashes of laser and x-ray radiation, scientists at the Max Planck Institute of Quantum Optics (Garching, Germany) took snapshots of the briefest electron motion inside a solid material to date. The electron motion lasted only 750 billionths of the billionth of a second before it fainted, setting a new record of human capability to capture ultrafast processes inside solids!

When x-rays shine onto solid materials or large molecules, an electron is pushed away from its original place near the nucleus of the atom, leaving a hole...

Im Focus: Quantum Sensors Decipher Magnetic Ordering in a New Semiconducting Material

For the first time, physicists have successfully imaged spiral magnetic ordering in a multiferroic material. These materials are considered highly promising candidates for future data storage media. The researchers were able to prove their findings using unique quantum sensors that were developed at Basel University and that can analyze electromagnetic fields on the nanometer scale. The results – obtained by scientists from the University of Basel’s Department of Physics, the Swiss Nanoscience Institute, the University of Montpellier and several laboratories from University Paris-Saclay – were recently published in the journal Nature.

Multiferroics are materials that simultaneously react to electric and magnetic fields. These two properties are rarely found together, and their combined...

Im Focus: Fast, convenient & standardized: New lab innovation for automated tissue engineering & drug

MBM ScienceBridge GmbH successfully negotiated a license agreement between University Medical Center Göttingen (UMG) and the biotech company Tissue Systems Holding GmbH about commercial use of a multi-well tissue plate for automated and reliable tissue engineering & drug testing.

MBM ScienceBridge GmbH successfully negotiated a license agreement between University Medical Center Göttingen (UMG) and the biotech company Tissue Systems...

Im Focus: Silencing bacteria

HZI researchers pave the way for new agents that render hospital pathogens mute

Pathogenic bacteria are becoming resistant to common antibiotics to an ever increasing degree. One of the most difficult germs is Pseudomonas aeruginosa, a...

Im Focus: Artificial Enzymes for Hydrogen Conversion

Scientists from the MPI for Chemical Energy Conversion report in the first issue of the new journal JOULE.

Cell Press has just released the first issue of Joule, a new journal dedicated to sustainable energy research. In this issue James Birrell, Olaf Rüdiger,...

All Focus news of the innovation-report >>>

Anzeige

Anzeige

Event News

“Lasers in Composites Symposium” in Aachen – from Science to Application

19.09.2017 | Event News

I-ESA 2018 – Call for Papers

12.09.2017 | Event News

EMBO at Basel Life, a new conference on current and emerging life science research

06.09.2017 | Event News

 
Latest News

“Lasers in Composites Symposium” in Aachen – from Science to Application

19.09.2017 | Event News

New quantum phenomena in graphene superlattices

19.09.2017 | Physics and Astronomy

A simple additive to improve film quality

19.09.2017 | Power and Electrical Engineering

VideoLinks
B2B-VideoLinks
More VideoLinks >>>