The 43North business plan competition is entering its fourth year, and organizers are continuing to focus on attracting quality applicants to the $5 million business plan contest.
"I think we made significant strides in that regard," said William Maggio, the 43North chairman. "We're doubling down on that this year."
Many of the changes that 43North organizers implemented last year will remain in place during 2017, with some minor tweaks.
Along with a $1 million grand prize for the contest's winner, this year's competition will offer bigger prizes to the second and third place finishers. Second place will carry a $650,000 prize, up from $600,000 last year, while a third place finish will be worth $550,000 this year and all of the other finalists will receive $500,000. Last year, all finalists from third place on down received $500,000.
And for the second straight year, 43North will charge an application fee, aimed at discouraging less-than-serious applicants from entering the contest. 43North is charging an application fee of $50 through April 12, rising to $100 for entries received from mid-April through the contest's May 24 deadline.
This year's contest also will set aside $300,000 in potential follow-up funding for the finalists. The follow-up funding was a new addition last year, although this year's contest will have slightly less funding available than the pot of $400,000 available to the 2016 winners.
"There's no script for this start-up competition," said John Gavigan, 43North's executive director. "We're writing it here in Western New York."
Gavigan said 43North has tried to expand and improve the support services it is offering to the 2016 winners, including a bulked-up mentorship program that now assigns an individual mentor to each firm.
43North officials also have been stepping up their efforts to recruit promising applicants to the competition, Gavigan said. That includes reaching out to venture firms and other early-stage investors to try to build a network of well-connected investors who are familiar with the contest and can refer promising startups that they encounter to apply to 43North. It also sometimes includes directly contacting promising start-ups to encourage them to apply, he said.
A little more than half of the 21 43North winners from the first two contests have maintained a presence in Buffalo after their one-year obligation to establish operations here ended. 43North also takes a 5 percent equity stake in each winner.
The business plan competition, part of Gov. Andrew M. Cuomo's Buffalo Billion economic development initiative, aimed at spurring entrepreneurship in a community that had been lagging badly behind the nation in new business formation.
The contest's 29 winners through the first three years have attracted $40 million in additional investment, Gavigan said. One company, 2015 winner ACV Auctions accounted for more than half of that additional funding, including a $15 million round of fundraising announced this week that included $9 million from venture capital firm Bessemer Venture Partners and $6 million from its existing investors.
Organizers initially focused on attracting upwards of 10,000 entrants during the first two years, but shifted their focus to a much smaller number of higher-quality applicants last year to streamline the selection process for a contest that, in 2015, rejected nearly three-quarters of its applicants out of hand because they didn't meet the contest's eligibility guidelines.
[Related: Smiles at the 43North Awards Ceremony]