New online business plan comp

[Dan1985]

Hi everyone,

I have created an online business plan competition it is Uk based however it is open to anyone, so please submit away. The description of the site and competitions are below, please let me know what you think of the concept and site? Very much appreciated.
http://www.betheinvestor.com


BeTheInvestor is a new format business plan competition for entrepreneurial ideas and startups. Entrepreneurs from both the UK and the US compete for cash injections to help start or build their businesses by uploading their ideas as one-minute video pitches.

The best pitches from each competition are chosen by business personalities. The registered site members, or "investors", then vote for their favourite idea and pick a winner.

Remember that you become the Investor. You and the other registered members decide where our money is going by voting for the most deserving pitches. By voting for a winning business, you can win prizes too! It's free to sign up, vote and upload your own pitches so what are you waiting for!

[akula]

okey...i've actually been heavily involved in what you're doing, so i can give you feedback

can you name any sucessful competitors who've made money doing what betheinvestor.com wants to do?

[chriswick]

can you name any sucessful competitors who've made money doing what betheinvestor.com wants to do?

Akula, can you just tell us and save everyone some time.

[akula]

Akula, can you just tell us and save everyone some time.

as far as i know, there isn't any

cambrian house raised like $2 million for their program

you could consider it the most sucessful program in the world with, so far, 6 thousand ideas having been submitted

nonetheless, is cambrian house making any money?

no, they are not, and they probably won't

[syia]

akula.. do you mean they don't really make any money?so the point of the competition is for what?

[akula]

akula.. do you mean they don't really make any money?so the point of the competition is for what?

well, that's the thing - there is no point, other than lifestyle reasons, wishful thinking, optimistic forecasting and altruism

the only proven business models (i.e. not government/npo initiatives) for commercializing new ideas are the venture capital model and the wrap up model....where you set up a public entity to build up a portfolio of acquisitions

other models have not been proven to be able to make money

[Jason G]

the only proven business models (i.e. not government/npo initiatives) for commercializing new ideas are the venture capital model and the wrap up model....where you set up a public entity to build up a portfolio of acquisitions

I’ve been trying to put a similar concept together as http://ycombinator.com/ , but in a more monetary fashion, however failure has proven right again. It can’t be done.

other models have not been proven to be able to make money

I concur with your analysis.

Any ideas on how to improve upon YCombinators business model?

[Jason G]

Bump...(in case, Danny missed it.)

[akula]

Bump...(in case, Danny missed it.)

thanks buddy..well, I didn't miss the post, it's just that it's such a loaded question

the problem: there's a wide census that the traditional model of institutional venture capital is broken. it's a very clear issue - vc funds (and angels) lose money.

the solution: now, to correct the problem, Paul Graham, Brad Feld, Charles River Ventures, Saul Klein, Sunil Bhargava and lots of other vc's/angels set up programs like y combinator, tech stars, quickstart, seedcamp and tandem entrepreneurs.

These programs are different in that they either feature either non institutional LP's, non equity finance, funding rounds of under <100k, or stage preference of "pre proof of concept". In other words, these guys are trying to fix the venture model by funding younger companies with increasingly smaller amounts of capital.

Do I think that these problems facilitate more/better innovation and deliver better IRR's for investors? I don't know (because the results are 5 years away), but I don't think so. The problem with financing nascent companies is that it's almost impossible to make any money doing it, because of onerous exit requirements for participating investors.

In other words, I don't think the solution for venture managers is to raise less money from LP's and come in earlier with smaller financing rounds. The solution is to;

- require more disclosure from venture backed startups
- this will help facilitate better support for these companies in the public exit markets also;
- US government needs to help support the emergence of alternative listing markets like AIM and,
- most importantly; there needs to be a change in corporate attitudes towards acquisitions

example: If a company like Nike is doing 15bill in revenues, what point is there for Nike to acquire an innovative 10mill/yr shoe design startup? What impact is the acquisition gonna do to Nike's top line? The answer is none (0.06%). For the amount of admin expenses involved, the acqusion is actually gonna lose money for Nike, and more than that, it's not a large enough transaction for Nike execs to justify their multi million dollar salaries. For a company that needs to show $billions in growth quarter to quarter, the acquisition isn't gonna move the needle.

And if Nike doesn't have an incentive to do the acquisition, then the financiers won't have the incentive for financing the said innovative shoes startup. Net result: shoe tech doesn't evolve, entrepreneurs don't make any money, and so there is no ecosystem for financing the next generation of entrepreneurs.

To answer your question: "Any ideas on how to improve upon YCombinators business model?"

Yes there are some ideas. Shops like Ycombinator need to promote the need for innovation in US corporate community and raise money from corporate venture funds. Likewise, shops like Ycombinator need to lobby the government for creating incentives for listed companies do to micro acquisitions. That's some areas where I see room for improvement as far as venture finance is concerned.

Now people, of course, I'll take all the flack I can get about corporate venturing, but if you are gonna flame me, at least come up with some alternative, positive ideas