Enriching The Entrepreneurial Ecosystem
For those seeking proof that the Minnesota Cup has done great things for the state’s entrepreneurial culture, consider these numbers: Finalists from the past two years collectively attracted $32 million in capital. More than 1,000 budding entrepreneurs entered the 2011 competition to vie for $185,000 in prize money—an increase from last year’s $130,000 pot. And new organizations keep signing on as sponsors, while the pool of volunteer mentors grew to nearly 50 this year.
The free annual business contest, now in its seventh year, has evolved into a major part of Minnesota’s entrepreneurial culture, giving participants a forum for testing out and improving their ideas. Since Scott Litman and Dan Mallin launched it with the University of Minnesota, Wells Fargo, and the State of Minnesota as partners, it has become a force for innovative good.
Just ask the 6,000 entrepreneurs who have competed since the first competition. Many say the Minnesota Cup helped power their company’s success, thanks to its deadlines and prowess at opening doors to resources, networks, and financing.
“I think we’ve played a significant role in making Minnesota a better place to launch a business,” says Litman, a veteran entrepreneur. He and Mallin are co-managing partners of Magnet 360, a network of agencies that provide integrated marketing solutions to companies nationwide. “Before 2005 there was no statewide competition; mentors weren’t working with entrepreneurs to this level.”
Getting Better All the Time
Minnesota Cup participants compete in one of six divisions—BioSciences, Clean Technology & Renewable Energy, General, High Tech, Social Entrepreneur, or Student—and they vie for their division title and the grand prize. It’s a high-stakes battle that can mean real money, including $25,000 for the grand-prize winner and $25,000 for most division winners (the student winner gets $10,000 and the social entrepreneur winner gets $20,000). Division runners-up receive $5,000, a new prize this year.
Participants submit an executive summary of a business plan to compete, and those who advance to later rounds of the contest have their plans evaluated by industry leaders, lawyers, business experts, venture capitalists, and others.
Throughout the competition, participants have opportunities to attend events sponsored by professional services firms
Additionally. the Gary S. Holmes Center for Entrepreneurship at the U of M’s Carlson School of Management pairs semifinalists with mentors from the business community. They offer insight about competitors’ business plans and advice such as how to prioritize during the start-up process.
“We have extremely strong retention from the mentors, and I think they enjoy the process and enjoy giving back their time,” says John Stavig, professional director of the center. “One of the best things Minnesota has going for it is a very supportive community for entrepreneurs, and they are very willing to help out.”
In addition to returning mentors, many past competitors who didn’t become finalists re-enter the competition to keep refining their business plans, thus creating a stronger pool of competitors. “Every year, the quality keeps getting better, whether it’s the quality of the entries and participation or the quality of support that companies receive during the process,” says Mallin. “There are more opportunities to network with people and sponsors, and some of that is driven by corporate support.”
Contest Brought to You By…
The Minnesota Cup started with the sponsorship of Riverside Bank founders Dave and Carolyn Cleveland, whose endowment at the U of M helps fund the prize pot. Over the years, the competition has continued to attract major corporate sponsors, including Carlson, Digital River, General Mills, and Xcel Energy.
Another organization that more recently began sponsoring the competition is the Arrowhead Growth Alliance, a public-private partnership that fosters economic development in northeastern Minnesota.
Many sponsors back the Minnesota Cup because they want to keep the state’s economy thriving. Carlson, together with the Carlson Family Foundation, became a lead sponsor last year with the core belief that a vibrant business community will maintain Minnesota’s cherished quality of life. Company Chairwoman Marilyn Carlson Nelson also views the sponsorship as a continuation of her family’s support of the Carlson School; she especially admires the competition’s Student division and its mentoring of student competitors, says David Nelson, executive director of the foundation (no relation to Carlson Nelson).
“Minnesota has benefited from a truly remarkable legacy of business and social entrepreneurship, and we feel that the Minnesota Cup helps support and inspire a new generation of entrepreneurs focusing on innovative solutions,” says David Nelson.
Earlier this year, General Mills committed to a three-year lead sponsorship.
“As a company that has made Minnesota its headquarters for more than a century, we fully understand the important role new and fresh ideas have in keeping Minnesota not only a great place to do business but also an attractive place to live and work,” says Jeff Peterson, director of innovation and strategy for the General Mills Foundation.
Many sponsors get behind the Minnesota Cup partly as a way to help their own industry. That was the case for Digital River, whose executives long for the era when Minnesota was a gigantic powerhouse in the computing industry, or the 1990s, when companies attracted significant venture capital, says Tom Donnelly, president and COO of Digital River, an e-commerce partner for businesses globally. Getting involved with the Minnesota Cup as the lead sponsor of the High Tech division encourages entrepreneurs with strong ideas and nurtures high-technology students in the state, who eventually could become Digital River employees, says Donnelly.
“The Minnesota Cup is one of the few forums we have in the Twin Cities where great ideas can get some visibility and entrepreneurs can get access to people who can help them succeed. Our whole economy in the United States is built on the backs of small businesses, and we tend to forget that.”