The 43North business plan competition to bring promising startups to the Buffalo Niagara region is off to a hot start.
The contest drew applications from more than 6,900 entrepreneurs, each seeking a piece of the $5 million in prizes that will be handed out to the 11 winners selected after a “Shark Tank” style grilling from a panel judges in late October.
The application pool was immediately whittled down to 2,603 qualified entries by eliminating potential entrants who were part of ineligible industries or failed to submit their entries properly.
The response thrilled organizers, who said the pool of applicants, which came from 96 countries and all 50 states, showed the broad appeal of the competition and helped showcase Buffalo Niagara as a good spot to start a new business.
“It did go well,” said Howard A. Zemsky, co-chairman of the Western New York Regional Economic Development Council. “We’re proud of the way it’s impacting the image of Buffalo.”
By dangling a $1 million top prize and riding a strong buzz on social media, the 43North contest easily surpassed the goal of 1,000 entrants set by its organizers back in February.
“That number is really incredible,” said Andrew J. Pulkrabek, the competition’s executive director. “It really is about showing people that this is a different place, when it comes to doing business. It shows that we’re a focal point for innovation.”
The business plan contest, part of Gov. Andrew M. Cuomo’s Buffalo Billion economic-development initiative, is aimed at making Buffalo Niagara a move vibrant region for fledgling businesses.
“Entrepreneurship was never our strong suit in Western New York,” Zemsky said.
To lure promising new ventures to the region, the state came up with the idea for a business plan competition that dangled cash prizes that were bigger – along with a broad range of side benefits – than were available from any other similar contest. The idea was to dangle a carrot that would be lucrative enough to attract entrepreneurs who otherwise never would have considered Buffalo Niagara as a potential site for their business.
Beyond that, organizers offered a range of additional incentives, including free space in a local incubator site for a year, as well as support from mentors and the ability to qualify for the lucrative tax incentives available under the state’s Start-Up NY program.
To drum up interest, 43North’s organizers mounted an aggressive campaign that combined social media postings on sites such as Facebook and Twitter, with dozens of events that organizers have held across the United States and Southern Ontario, as well as in India and Israel.
The $5 million in prizes, ranging from a grand prize of $1 million to runner-up prizes totaling $4 million, provided an eye-catching hook across the globe.
Venture capitalist Fred Wilson blogged about the contest, exposing the competition to the tens of thousands of people who follow his postings. Chris Sacca, a Buffalo native who was one of Twitter’s first major financial backers, also tweeted about the contest. In all, more than 14 million people were exposed to the contest through social media, Pulkrabek said.
“That was part of the goal of this: To create a buzz about Buffalo as a place for entrepreneurship and to start a business,” said Christina P. Orsi, regional director for Empire State Development in Buffalo.
“This just helps the brand,” said Jordan A. Levy, the Buffalo venture capitalist who heads the group’s steering committee. “There are 2,600 people who say they would want to start their company in Buffalo. How wonderful is that?”
The 10 industries with the most entrants in the contest ranged from information technology and business services, to media and entertainment and e-commerce. Rounding out the Top 10 were health care and biotechnology, education, clean tech and energy, advanced manufacturing, sports and fitness, and agribusiness.
The 11 prizes will go to entrepreneurs whom the contest’s judges deem to have the most promising plans for a new business. Eligible are early stage ideas and businesses just getting started. Winners are required to start and operate their businesses in the region for at least a year.
Winners will receive rent-free space in an incubator site that will be part of the state’s Start-Up NY tax-free zone, meaning that those businesses won’t be subject to most state taxes and that employees won’t have to pay state income taxes for 10 years. The winning firms also will be provided access to other resources and mentoring services to help them turn their ideas into viable businesses.
Organizers believe that Start-Up NY benefits will be a powerful incentive to help convince the winning entrepreneurs to stay in Buffalo after their one-year commitment ends.
State officials launched the 43North competition as part of the Buffalo Billion initiative to help spur new business formation in Buffalo Niagara – something that had lagged over the last decade. Other parts of the Buffalo Billion initiative include hundreds of millions for a high-tech clean-energy manufacturing center, a manufacturing competitiveness institute, a manufacturing training center, a medical innovation hub and a genomic research center, among other investments.
The grand prize winner will get the $1 million, but six others will come away with $500,000 each, and an additional four entrepreneurs will get $250,000 apiece. At least one of the winners must be local.
In exchange for the money, the winners have to hand over a 5 percent stake in the business.
The first phase of the competition, which ended Saturday, required entrepreneurs to provide a relatively brief summary of their ideas that identifies potential markets and customers and offers their visions for the ventures.
A cadre of more than 200 volunteer judges from a wide range of industry sectors now will spend the next few weeks pouring over the entries. Organizers plan to assign about 10 applications to each judge, pegged to their individual area of expertise.
By the end of June, organizers plan to whittle down the pool of applicants to about 100 semifinalists, who then will be asked to submit more detailed business plan and financial information. Once that’s done, organizers will evaluated more intensely during a five-day session from Sept. 15 to 20 that will include 10-minute online presentations available for viewing by the public.
After those presentations, the pool will be narrowed to a field of 11 finalists who will be guaranteed of receiving a prize, although the size of the award won’t be determined until the final stage of the competition, which will take place from Oct. 27 to 31.
For that event, the 11 finalists will travel to Buffalo to make 10-minute presentations about their businesses to a panel of judges, followed by 10 minutes of questions from the judges.