May 13–It’s not always the thought that counts.
At a recent business plan competition at the University of Maryland College Park, young engineers and would-be chief executive officers vying for a piece of a $50,000 pot pushed everything from super-safe all-terrain vehicles to super-strong body armor.
In the end, they learned a golden idea needs to be backed by months of detailed market research, a smart leadership team and a sharp business proposal.
“There is more to creating a good company than just having a good technical idea,” said Nariman Farvardin, dean of the A. James Clark School of Engineering. “We have to prepare our students entering the real world.”
The 3-year-old competition — held by the university’s business and engineering schools — is the culmination of an entrepreneurship program modeled after one at Stanford University. The program puts future entrepreneurs through a rigorous round of technology boot camps, seminars with venture capitalists and marketing classes.
By marrying the technical mind with business knowhow, Maryland is hoping its students will learn how to take an idea from glorified research project to commercial success.
“There are so many engineers looking to take their ideas into further development, and they’re finding that it’s not that easy,” said Mark Wellman, assistant dean of the MBA and master’s of science programs at the Robert H. Smith School of Business. “We’re teaching them how you can take an idea and develop it yourself without a large company behind you.”
When Maryland began offering two entrepreneur classes two decades ago, each had less than 15 students.
Today, there are several courses in the undergraduate and graduate programs with more than a hundred students, and a waiting list for the Hinman Campus Entrepreneurship Opportunities Program.
Undergraduates in that program live in a digital residence hall with offices, laboratories, conference facilities and state-of-the-art computer and communications equipment to help them start their companies.
Jason Volk, a third-year accounting student in the Hinman program, teamed up with computer engineer Sandeep Mehta to develop Alertus Technologies Inc., a wireless communications emergency warning system for company and school campuses. Alertus has already garnered about $100,000 in government and nonprofit grants.
On Friday, Alertus won $15,000 in the business plan competition.
“We couldn’t have gotten this far without the school. It’s helped us take our idea on to the next level,” Volk said.
This year’s top winner worried the panel of judges — local venture capitalistsand intellectual property lawyers — when the young company said it had yet to find a CEO to run the business. But Terplicators Inc.’s convincing business plan and marketing research tipped the scales in its favor.
What began as an idea for a novelty item to be sold in malls changed six times over the year to become a software application that speeds up the molding process for manufacturers of prosthetics, jewelry, toys and even plastic surgery.
“We’ve really learned a lot from this competition,” said Rohit Kumar, 25, a master’s degree student in mechanical engineering and co-founder of Terplicators. “Our plans have evolved, become more focused and we’ve met a lot of industry people. We’ve learned how to improve our business presentation and find out what funding is available to us.”
To go commercial, Kumar figured the company needed $40,000 to hire software developers, buy computers and pay licensing fees. Its $20,000 first-place win got it halfway there.
Aside from Alertus and Terplicators, the other finalists were: Cermet Solutions, a developer of lightweight and inexpensive body armor; Creative Photonics Inc., a digital light processing systems firm; Rogue Amoeba Software LLC, a software company that enables users to record, enhance and digitally save audio from any source on the computer; and Castle Duncan Inc., developers of an all-terrain vehicle that boasts a roll-cage and four-point safety harness.
“When you’re looking for young entrepreneurs, you want someone hungry with an idea and really passionate,” said Jonathan Aberman, a judge in the competition and partner in Fenwick & West LLP in Washington.
But more importantly, said fellow judge Robert Cerbone of Telecommunications Development Fund, “We’re looking for companies with the most complete business plan. We’re looking for companies that are beyond the product development stage.”
All six finalists in the competition received some money from the $50,000 prize — mere peanuts when it comes to starting a business, but in many cases, enough to give start-ups some wiggle room to pay for equipment, patents or legal advice.
For previous winners, it was just enough to get a good start.
NovOculi received $500,000 from a New York venture capital firm last year to start up a business that designed a device to perform LASIK eye surgery as an incision-less procedure.
Chesapeake PERL Inc., a protein manufacturing company started by a Maryland biotech student, has completed two rounds of financing, and received $1.5 million in grants.
Both companies won top placement in the business plan competition, which is open to current students and graduates.
In many cases, the money wasn’t nearly as important as the powerful business connections made.
Castle Duncan didn’t win the top prize, but it got something better: the attention of a communications technology firm in Reston, Va. that wants to invest in and use its roll cage-equipped Joker ATV for homeland and international security systems.
The $7,500 prize won by Rich Duncan and his business partner, Adam Herbert, a mechanical engineering student, will go toward building one of 10 Joker ATVs pre-sold this year.
“I’ve been doing this for 2 1/2 years now with my own money,” said Duncan, 32, who graduated from Maryland with an engineering degree. “Getting our foot in the door is the hardest part and this competition has done that for us.”
“We’re really excited about the potential investment,” Duncan said. But as with any good business man, he added: ” We don’t count on anything until it happens.”
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(c) 2003, The Baltimore Sun. Distributed by Knight Ridder/Tribune Business News.
