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Education Student business meet offers real-world competition

Wisconsin-based Imago Scientific Instruments was one of 19 companies that traveled to San Diego recently to get feedback on its business plan and possibly secure seed money.

Imago didn’t raise the $2.8 million it says it needs to fund development of its high-tech product while in San Diego, but the company did walk away with $15,000 , the grand prize in San Diego State University’s Venture Challenge 2001.

The “companies” at the event were real ones with real business plans, and some with real products on the market. But the “company representatives” are MBA students from schools across the country competing in the 12th annual International Student Business Plan Competition, hosted by San Diego State University’s Entrepreneurial Management Center.

The event was by no means a mock competition. The teams were vying for the grand prize to use as seed money to start, or in some cases expand upon, their ventures.

Imago, for example, ultimately is seeking $2.8 million to fund development of its 3-D local electron atom probe microscope. Representatives of the Madison, Wis., firm said the microscope fills a critical need in the high-tech marketplace for an accurate, efficient measurement device with nanotechnological measurement capabilities.

“This is as close an approximation to real life as you can get,” said SDSU President Stephen Weber. “These are not make-believe ideas. A lot of these folks go on to found companies, and at these competitions they hook up with potential investors.

“The $15,000 is nice, but they’re playing for real stakes.”

Alex De Noble, director of Venture Challenge, said the event has grown to new levels over the years.

The competition started as an internal SDSU competition that went statewide in 1990, national in 1991, included schools throughout Canada and Mexico from 1992-1996 and went overseas in 1997.

“Twelve years ago you could win by just coming up with a pure concept for a business,” De Noble said. “But every year we started seeing plans and teams that were getting closer and closer to commercialization.

“Now many of the teams have already raised money, already developed product prototypes and already have sales.”

Second- and third-place winners were awarded $3,500 and $1,500.

Dimensions Furniture, from Indiana University, took second place with a business model that unites objectives of product innovation and low cost in order to provide the highest value to customers. Dimensions plans to market its products solely to discount retailers, office supply superstores and wholesale clubs.

The third-place winner was Zymex Pharmaceuticals from the University of Georgia. The company already has raised $1 million in the first found of financing and plans to start the research firm in June. Zymex wants to use technology to develop new lead compounds for diseases such as AIDS, Alzheimer’s disease and cancer.

Giles Bateman, former chairman of CompUSA and a co-founder of the Price Club, was one of the judges of the event. As a private investor, he said he could see the likelihood of some of the companies getting funded and some of them not getting funded.

“I think most of the business plans I see will start and some of them will succeed,” Bateman said. “I think they are using some interesting technology, and a lot of it is patented and protected technology.”

Bateman presented the Golden Phone Awards, one of the new awards added to the competition this year. He said the winner, which is the team with the best telephone pitch, didn’t make it to the final round and said that was a true lesson of the real business world.

“There are a lot of investors out there, and they see things in different ways,” he said. “Just because you get turned down by one investor doesn’t mean you stop persevering.”

Three recent competition winners did go on to transform their business plans into profitable companies.

SDSU’s 1999 team wrote a winning business plan, and as a result launched Application Technologies, a developer and licenser of new packaging products. The company was showcased in Inc. magazine’s January 2000 issue and later negotiated more than $1.5 million in licensing agreements with pharmaceutical and skin-care firms before being acquired for $4 million.

The University of Maryland’s 1999 team developed a plan for Superbuild.com and went on to become hardware.com, an online home improvement site. Today, hardware.com has an inventory of more than 45,000 products.

Kennesaw State University’s 1997 team, Tourdates.com, was acquired by Launch Media for $11.6 million in stock. Clients include AOL/Digital cities, Bellsouth, MP3radio.com, varsitybooks, and Ford Motor Co.

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