Organizers of the 43North business plan competition are making changes that should draw fewer but higher-quality entries for the 2016 version of the contest.
Officials unveiled the changes at an event Friday on the Buffalo Niagara Medical Campus that celebrated the first two years of the competition that awards $5 million in prizes annually to promising startup companies.
For 2016, the contest for the first time will require applicants to pay an entry fee of up to $100 to enter the competition, and officials are boosting the length of the application from eight to 50 questions.
“We want to know who’s serious about applying,” John T. Gavigan, 43North’s executive director, said following the event in the 43North incubator in the Thomas R. Beecher Jr. Innovation Center.
The 43North contest was launched in 2014 as a small piece of Gov. Andrew M. Cuomo’s Buffalo Billion initiative, financed largely through the New York Power Authority. In exchange for the funding, mentor support and free rent for a year that the winning companies receive, they must move to Buffalo for a year and turn over a 5 percent ownership stake in their firms to 43North.
Of the first 11 winners, six stayed in Buffalo after their one-year commitment ended.
The contest drew 11,350 applicants in 2015, but many of the entries – 74 percent – were immediately eliminated because they didn’t meet the competition’s eligibility requirements. And Gavigan said it took 3,300 work hours to sort through and judge the initial batch of applications. The initial entries were whittled down to 100 semifinalists.
This year, Gavigan said he wouldn’t be surprised if the contest drew just 1,000 applicants.
That’s part of 43North’s focus on quality over quantity for 2016, said William J. Maggio Jr., 43North’s board chairman.
“As good as it’s been, it can be better,” Maggio said at the event.
Another change to the contest is the way the prize money is divided up. Last year, as in 2014, the winner could receive $1 million, with $500,000 or $250,000 prizes for the others.
This year, eight winners will receive either $1 million, a runner-up $600,000 prize, or one of six $500,000 prizes. Another $400,000 in funding will be held in reserve to be awarded in 2017 to winning companies that show particular promise. Details on how the extra $400,000 would be awarded weren’t immediately available.
The structure of the final week of the competition, and the awards night, is changing, too.
Organizers plan to invite up to 20 finalist teams, instead of the 11 in previous years, to Buffalo in October to pitch their businesses in person to a panel of judges. The competition will wrap up on its last day with six winners being awarded the $500,000 prizes in the morning and a live, two-team face-off for the $1 million prize in the evening.
The early-bird application fee is $50, starting Friday and running through March 31. The regular fee of $100 applies from April 1 to May 31, when the application window closes. Gavigan said company founders who can’t afford the entry fee can receive a hardship waiver. Information is available at 43north.org.
Friday’s announcement was attended by more than 120 people, including schoolchildren from several public, private and charter schools in Buffalo wearing powder-blue 43North T-shirts, Lt. Gov. Kathy Hochul, Mayor Byron W. Brown and Power Authority Chairman John Koelmel.
“43North really is remaking the business landscape in the City of Buffalo,” Brown said. “It is opening the eyes of the business community nationally and globally to the fact that Buffalo is a good place to start a business, to maintain a business and to grow a business.”
Founders of two of the 2015 winning teams, Plum and Painless1099, also were introduced at the event.
Caitlin MacGregor, CEO and co-founder of Plum, comes into the 43North incubator once or twice a week from her company’s headquarters in Waterloo, Ont. Plum makes software that combines behavioral science with predictive analytics to help companies screen job applicants. The company had six employees when it entered the 43North contest and it has 10 now, with three new hires coming on board soon, MacGregor said. One of the 10 works in Buffalo.
Ace Callwood, CEO and co-founder of Painless1099, which helps independent contractors save for tax season, moved most of his company to Buffalo from Richmond, Va., and the startup now has six employees here and a part-time employee in Virginia.
“It has been awesome to see how well we’ve been received and the doors that have opened as a result of 43North,” Callwood said.