Monday, May 11, 1998
Contest gives entrepreneurs opportunities
ANDERSON: Venture capitalists hear proposals about business
plans from students, alumni
By J. Sharon Yee
Daily Bruin Contributor
The Anderson Graduate School of Management became a showcase
last week for enthusiastic entrepreneurs seeking money to help
start their businesses.
"Without entrepreneurs, we wouldn’t have cars, lights, buildings
and other technology that is often taken for granted," said Alan
Carsrud, faculty sponsor of the Forum and chair of the UCLA
Ventures Program.
Last week, Anderson students and alumni competed for $30,000 in
prize money by presenting their business plans in front of venture
capitalists, investment bankers and other wealthy individuals.
The second-annual Knapp New Venture Forum featured an extensive
assortment of companies in a wide range of fields, from
biotechnology to on-line music distribution.
"We wanted to help teach business students how to write
realistic and compelling business plans," said Bud Knapp, an
Anderson Board of Visitors member and a co-sponsor of the
Forum.
Of the 15 original contestants, four finalists were chosen to
present their plans again on Wednesday night. The winners will be
announced to the public this week.
Judges evaluated companies based on which ones offered the best
return (profits) at the lowest risk and award the prize money
accordingly.
These exemplary companies were: TP School Supplies,
DiscReputable, Guardian Publishing and Global Horizons.
DiscReputable, for example, is an on-line service which
customizes CDs for their customers.
This year’s contest represented the first time Anderson alumni
were allowed to compete.
A separate prize of $7,000 designated for alumni only was
divided among two companies, Kids On-Line America and Virasim.
Business plans for the sale of Virasim, a medical algorithm used
to help map brain patterns developed by Asim Dasgupta, professor of
immunology, were formed in conjunction with the Ventures
program.
Under this program, new science technology is matched with the
expertise of Anderson students, who in turn help promote and market
the technology.
Within the last 10 years, entrepreneurism has become a growing
trend, reflected Robb Kempken, co-manager of the student-run
Forum.
"More and more people are looking to be their own bosses because
they want to have more of an impact on what they do," he said,
"It’s hard to feel those rewards in a big company setting."
"I think a lot of people just want to have the ability to see
the fruits of their labor and be in a position to make decisions
that impact the direction of their own businesses," said Cassius
Conliffe, a second-year strategy and marketing student.
He also attributed the trend to the recent corporate downsizing
and the highly publicized success stories of high-tech mogols like
Bill Gates.
"I think it’s more of a personality thing," said Joe Locke, a
second-year student and the think tank behind Global Horizon
Management.
"Some people like taking the risk and are more comfortable being
their own boss," he added.
Conliffe, who spent roughly 10 weeks writing the business plan
behind TP School Supplies, mentioned one lesson he learned in
presenting his plan to potential investors and employees.
"I realized that it isn’t about convincing others the amount of
money you can make, but rather how well you can sell the management
of your plan," he said.
Venture capitalists are small groups of bankers who invest
nearly $4 billion a year in multiple business they believe in,
Carsrud said.
Their more sophisticated counterparts, "angel" investors, often
fund younger, newer companies with hopes of high returns and faster
growth, Kempken explained.
"The risk venture capitalists undertake is like betting on race
horses," Carsrud added, explaining how on average, one out of every
10 firms invested in is truly successful.
Of the remaining nine companies, one will fail completely, and
the other eight will moderately succeed, earning enough profits to
stay afloat, but relying mostly on the earnings from the prosperous
firm, he continued.
Aside from developing a well-defined plan, entrepreneurs
typically have the most difficulty getting funding for their
projects, as their savings do not always provide enough to get
things off the ground, Carsrud said.
"Sometimes winning is the most fun after knowing what losing
feels like," he said, further illustrating why investors continue
to take chances on smaller, unknown companies.
Depending on the industry, start-up funding can range anywhere
from $5,000 for Internet servers and $200 million for biotechnology
companies, Carsrud said.
Though there are many business plan forums across the nation,
Carsrud stressed the realistic qualities of the Knapp over other
forums, which are largely academic and do not necessarily address
the practicality of the plans.
"This experience gives students the opportunity to learn by
doing, to present their plans and receive feedback and support from
real-life venture capitalists and angel investors," he said.
Generally-speaking, entrepreneurs make up about 13 percent of
the population.
"That’s the nature of the game," he reflected, "If it were
easier, everyone would do it."
JAMIE SCANLON-JACOBS/Daily Bruin
(Left) David Mandel, a UCLA graduate in business and law, and
UCLA business senior Chris Jarvis address a group of industry
representatives in Korn Convocation Hall about two companies they
created.