The second edition of the 43North business plan competition won’t pick its winners for nearly three months, but the contest already has taken a big step toward lining up most of the $8.2 million it will need for the event’s third year.
The 43North contest is in line to receive up to $6 million in funding from the New York Power Authority for its 2016 competition – enough to pay for nearly three-quarters of its estimated costs – after the cash grant was recommended Tuesday by a panel that helps distribute money raised from the sale of unallocated electricity from the Niagara Power Project.
The funding recommended by the Western New York Power Proceeds Allocation Board, if approved by the Power Authority’s Board of Trustees, would put the 43North competition on more secure financial footing than it was heading into its second year, when funding wasn’t lined up until early December – uncertainty that the contest’s top official last year, Andrew Pulkrabek, said contributed to his decision to step down less than two weeks later.
“We’ve got some good momentum going on now,” said John T. Gavigan, 43North’s executive director. “It gives us so much more time to plan for next year.”
But while the 43North funding was approved unanimously, board member Dennis Elsenbeck prodded Gavigan to vigorously push to make the business plan competition financially independent.
With the 43North contest absorbing $17.4 million in funding from the power allocation board – slightly more than half of the $34.1 million it has awarded so far – Elsenbeck said the competition has taken a “significant” portion of the money that has been set aside for economic development projects within 30 miles of the Niagara Power Project.
“We need to have a more formal sustainability plan that the board can review,” said Elsenbeck, National Grid’s regional executive in Buffalo. “I’d like to see a plan, and I’d like to see it in a short time frame, maybe by January 2016.”
Gavigan said the business plan contest hopes to become financially independent, but currently needs the NYPA funding to establish itself. To that end, the competition has raised about $1 million this year from eight sponsors that have signed multi-year funding agreements and is looking into ways that it could raise additional funds from the expertise and growing awareness of the 43North brand. 43North, which receives a 5 percent ownership stake in each of the 11 prize-winning firms, also plans to use any money it earns from its equity interests to fund the competition in future years.
“It’s good to have stimulus money to plant the seed,” Gavigan said. “But you can’t stay on the government dole forever.”
The business plan competition, billed as the most lucrative in the world, offers $5 million in prizes – including a $1 million grand prize – to 11 start-up businesses that agree to move to Buffalo for at least one year. The contest is a small but potentially powerful part of Gov. Andrew M. Cuomo’s Buffalo Billion initiative. The idea behind the competition is to address the region’s lack of entrepreneurs and business startups by offering lucrative prizes to lure high-potential ideas for new businesses to the Buffalo Niagara region.
The first round of the 43North contest drew 2,603 entrants that met the competition’s guidelines from 96 countries and all 50 states. The 11 finalists shared four $250,000 prizes, six $500,000 awards and a single $1 million grand prize, which went to ASi, a Town of Tonawanda material-shaping business.
This year’s competition attracted even more qualified entrants – more than 3,000 – that has since been whittled down to 110 semifinalists. More than a quarter of the semifinalists – 30 in all – are from Western New York, including 28 from Erie and Niagara counties. Nearly half of the semifinalists are from New York. Almost 30 percent of the semifinalists are from other states, including 11 from California. Almost a quarter of the remaining applicants – a total of 26 – are from outside the United States. The winners will be announced in late October.