2013 Minnesota Cup Winners: Elevating Entrepreneurs
Nine years into the Minnesota Cup competition for breakthrough business ideas, entrepreneurs in the state now view the contest as an essential stop on their way to success. As the thousands of participants can attest, entering the Minnesota Cup can bring immeasurable value for early-stage businesses, from mentoring to publicity—and often, prize money and financing.
With a total of $200,000 on the line, the Cup attracted nearly 1,100 entries this year from entrepreneurs across the state, its biggest pool yet. They competed to win one of six divisions, and those winners vied to capture the Minnesota Cup grand prize.
Since it began it has helped more than 8,000 entrepreneurs refine their ideas. Minnesota Cup alumni have attracted nearly $65 million in venture capital funding since 2009 alone, while creating scores of jobs. The event also spawned a more vibrant ecosystem, where entrepreneurs can develop their ideas and bring them to market, says Scott Litman, who started the Cup with Dan Mallin in 2005 and grew it to the largest statewide new-venture competition in the country.
“We’re creating this virtuous cycle,” says Litman, co-managing partner with Mallin of Magnet 360, a strategy, technology, and creative services firm in Minneapolis. “We’re seeing more support for entrepreneurs through the Minnesota Cup and other organizations, which means high-quality outcomes for the best-performing entrepreneurs, which inspires more people to be entrepreneurs. That’s what happens in a well-run entrepreneurial ecosystem.”
For many early-stage companies, the free Minnesota Cup opens doors to resources that entrepreneurs typically couldn’t obtain without plenty of cash. For starters, every semi-finalist gets paired with one of 65 professional mentors. It’s usually someone from their industry who can review their business plan with an expert’s eye.
Participants also can attend several seminars held by sponsors, such as how to raise capital or write a compelling business plan, and they broaden their networks by meeting judges and other professionals. “Here they get these opportunities for free, and it’s with people in the community who see value in helping them succeed,” says Minnesota Cup Director Melissa Kjolsing.
Many mentors take a deep interest in the entrepreneurs they advise, and often, mentors join the company’s board, or even invest. Overall, Minnesota Cup mentoring creates stronger, more market-ready companies coming out of the state, says John Stavig, professional director of the Gary S. Holmes Center for Entrepreneurship at the University of Minnesota. “It’s helped to accelerate the growth of companies that have gone through the Minnesota Cup process,” he adds.
Talk to any Minnesota Cup alum, and they rave about the insight, expertise, publicity, and connections they made during the competition. Julie Gilbert Newrai, CEO of PreciouStatus, which won the 2012 Minnesota Cup, calls participating “one of the best experiences an entrepreneur could go through.”
She appreciates the scrutiny from mentors and judges, which helped her focus her model. Another vital asset: connections like the one she forged with her mentor, Linda Hall, who now chairs the PreciouStatus board.
The Minneapolis company, which connects caregivers with the family and friends of people in their care using instant updates, enjoyed quite the year. Since its victory, PreciouStatus grew in several markets, including child care centers, schools, nursing homes and health care facilities.
Newrai closed on $1.5 million in financing, now employs 28 people, and reports that PreciouStatus sends out updates to 1 million people about 300,000 people in care. “We’ve grown like crazy, in a great way,” she says. At OrthoCor Medical, which won the Life Science and Health IT division last year, business also is going strong. OrthoCor secured FDA approval to use its knee pain-relief system for the entire body, including ankle, shoulders, and lower back; many private insurance companies now cover the medical-grade device. President and CEO John Dinusson says he benefitted from participating in myriad ways, including advice that helped him refine OrthoCor’s sales and marketing strategy. “The Minnesota Cup allowed us to get more awareness of our product,” he notes.
For 2006 winner Vast Enterprises, the path through the competition and many successful years of business resulted in its sale in late 2012 to AZEK Building Products of Pennsylvania. Being part of a larger company means growing to a sales force of 80 from five, and nationally distributing its pavers made from recycled materials. “By winning the Cup and other local awards, it really helped in telling our story to dealers and contractors,” notes Peter Jonswold, sales director.
A steady stream of capital helped 8thBridge advance after winning the Cup in 2009 as Alvenda. A leader in monetizing social media for clients like Delta and Subaru, the company landed investments totaling $15 million—one-third from mentor Michael Gorman’s firm Split Rock Partners. Entering the Cup gave the 8thBridge team a push to polish the company’s business plan and prepare pitches to financiers, says co-founder and CEO Wade Gerten. Its latest iteration involves partnering with clients to build social media experiences on their own websites such as Sur La Table, where customers create collections of items and share them on Facebook or Pinterest.
Capturing the Cup can mean money, publicity, and credibility—ingredients to success for early-stage businesses.