"The Super Bowl of World Business-Plan Competition" Business Week, 1993
"The Mother of All Business-Plan Competitions" Success, 1997
"The Granddaddy of Them All" Red Herring, 2000
"The Rose Bowl of business-plan competitions" Inc., 2004
With aspiring entrepreneurs soliciting start-up funds from experienced investors, the Moot Corp Competition simulates the real-world process of raising venture capital. MBAs from business schools around the globe come to The University of Texas at Austin each May to present their business plans to panels of investors. From among myriad offerings is selected the best new-venture opportunity. Founded in 1984, the Moot Corp Competition is both the first and longest operating, inter-business school, new-venture competition in the world.
The Early Years
In the early 1980s, two Texas MBA students, Steven A. Mailman and Barbara Oppenheimer, yearned for a business school activity as challenging and prestigious as “moot court” in law school. They envisioned a competition in which MBAs working in teams would conceive an idea for a new business, develop the idea into a written business plan, and present the plan to a panel of entrepreneurs, venture capitalists, accountants and lawyers. Their idea was not enthusiastically received in all quarters. The Dean of the Texas Business School at that time was concerned that the Moot Corp Program would divert external funds from his favored projects. But a faculty committee voted by a narrow margin to approve the launch of this program. The competition’s inaugural in 1984 involved only UT MBAs and was shepherded by Professor Kenneth E. Knight during this critical phase. Dr. George Kozmetsky and the RGK Foundation played major roles in the Program’s survival during these early years.
National, then International
In 1989, under the leadership of Professor Raymond W. Smilor, the Moot Corp Program held its first national competition. MBA teams from Harvard, Wharton, Carnegie Mellon, Michigan and Purdue joined Texas in the competition. MBAs and faculty advisors alike were enthusiastic about the Moot Corp experience, and the following year Dr. Smilor invited three prestigious business schools from outside the United States to participate. In 1990, the London Business School, Lyon Graduate School of Business (France), and Bond University (Australia) were represented, and approximately the same cast of universities competed in 1991 and 1992. In the summer of 1992, Dr. Smilor resigned from The University of Texas at Austin to become Director of the Kauffman Foundation Center for Entrepreneurial Leadership.
Going Global and Increasing Impact
Having been involved with the Moot Corp Program since its inception, having once co-taught the Moot Corp course with Ken Knight, and having been an entrepreneur, Gary M. Cadenhead, Ph.D. was a natural choice to succeed Ray Smilor.
Since becoming Director of the Moot Corp Program in September 1992, Dr. Cadenhead has transformed it into a global program; deepened and broadened the participation from American business schools; and formalized the sharing of ideas for improving entrepreneurship education among the participating faculty.
The Competition in 1992, the last before Dr. Cadenhead became Director, involved 11 universities: eight from the United States and one each from Great Britain, France and Australia. To have a greater and more significant impact on both entrepreneurship education and the reputation of UT Austin’s entrepreneurship program, the number of participating universities had to grow. The initial American strategy had been to invite only universities with top-twenty MBA programs. This strategy had two shortcomings: it excluded universities with outstanding entrepreneurship programs in lower-ranked business schools; and it excluded MBAs from unranked schools who might have outstanding new venture proposals.
The first of these deficiencies was overcome by including top-ten entrepreneurship programs in the invitational set. And now, by inviting winners of other new venture competitions to participate, the second concern has been put to rest as well.
The number of MBA new venture competitions in the United States has continued to grow. Not long after the establishment of the Moot Corp Competition, the University of Nebraska - Lincoln began its own contest in 1989, followed by San Diego State University in 1990, the University of Georgia in 1991, the University of Oregon in 1992, the University of Indiana in 1996, Rice University in 2001, and Clark Atlanta University in 2001. The winner of each of these contests is now invited to the Moot Corp Competition. Intra-business school competitions have also recently been introduced at such prestigious institutions as the Kellogg School, the University of Chicago and the Harvard Business School, and MIT has a university-wide competition instituted nearly ten years ago.
The strategy for global expansion initially entailed inviting the top business schools from regions not already represented. This resulted in participation from universities in Europe, Asia and Latin America.
The second strategy for global expansion involved licensing the Moot Corp name to prestigious universities in Asia, Australia, Europe, Latin America and Africa; and providing technical assistance so that they could hold regional Moot Corp Competitions. The Chinese University of Hong Kong held the first Asian Moot Corp Competition, directed by Professor Bee Ling Chua, in 1998. The best business schools in Asia, representing China, Hong Kong, India, Korea, Singapore, Philippines, Taiwan and Thailand, now compete every March.
The first Australian Moot Corp Competition began in 1999, and it now includes teams not only from Australia, but also other Pacific Rim countries. In 2000, the Ivey Graduate School of Business at the University of Western Ontario launched the first Canadian Moot Corp Competition. The first African Moot Corp Competition was also held in 2000. The inaugural Latin American Moot Corp Competition was held in 2001 in Sao Paulo, Brazil, and hosted by Fundacao Getulio Vargas.
The expansion strategy has succeeded. Thirty universities now send teams to Austin to compete in the Moot Corp Competition and many more are eager to participate. In addition, the international success of Moot Corp Competitions has contributed to the prestige of the McCombs School of Business’s entrepreneurship program and to its ranking. A recent entrepreneurship program ranking by Success specifically listed the Moot Corp Competition under its “Wow Factor” for the McCombs School of Business.
No Longer Moot
In the early years, the Competition was truly moot: no MBAs launched the venture that was the subject of their business plans. The process was strictly an academic exercise. However, many of the participating MBAs went on to work for or started their own entrepreneurial ventures and became successful entrepreneurs; but they did not “ride the horse” they had written about in their business plans.
But then, a funny thing happened on the way to expansion and globalization. The process ceased to be “moot”: MBAs started converting their classroom creations into real-life enterprises. Since 1993, the team winning the annual competition for UT MBAs has moved into the Austin Technology Incubator and launched its venture.
As the reputations of the Moot Corp Competition and the entrepreneurship program at The University of Texas at Austin have spread, increasing numbers of entrepreneurially minded students have entered the UT MBA program. Coincident with this experience, many teams are launching businesses each year. Similarly, MBAs from around the world participating in the Moot Corp Competition are increasingly likely to launch their ventures.
Unexpected Funding, Then Planned Funding
Since 1997, the Moot Corp Competition has been held in conjunction with the Texas Venture Capital Conference, sponsored by The Capital Network, a not-for-profit investor network created by the IC2 Institute of The University of Texas at Austin. At this Conference, some 25 entrepreneurs have ten minutes apiece to showcase their companies to the over 500 venture capitalists in the Four Seasons Hotel ballroom. Because the Texas Venture Capital Conference is held the day before the Moot Corp Competition begins, Moot Corp participants can observe entrepreneurs doing for real what they themselves will simulate. The MBAs have an opportunity to interact directly with investors at the Conference’s closing reception, where each Moot Corp team has a table to display its production. Scheduling the Conference and the Competition back-to-back facilitates some of the venture capitalists’ staying on as judges for the Moot Corp Competition.
In 1999, for the first time, several teams received funding from one or more of the judges. These investments were brokered outside of the formal process of the Competition. With increasing numbers of MBAs intending to launch their ventures and more of the judges emerging from the venture capital community, it is increasingly likely that more teams will find backing for their dreams as a result of having participated in the Competition.
The Moot Corp Pontoon Fund was founded in 2001 to provide early stage bridge loans of $100,000 to the Global Champions in order to give the entrepreneurs financing while they are raising capital. The loans are convertible into equity at the same price as negotiated with the initial venture capital investment. In addition to the goal of facilitating the launch of the winning venture, another goal is to endow the Moot Corp Program through capital gains from the Fund.
The Spiral Factor
In the final round of the Moot Corp Competitions, both the finalists' presentations and their question and answer sessions with the judges are videotaped. The winning team’s video and business plan, along with appropriate instructional materials, are packaged into a “new venture module” which becomes a teaching case for the following year’s competitors. In effect, this top-notch business plan becomes the benchmark for the following year: expertise accrues and the achievement level is constantly rising. This unique spiral factor has worldwide impact, as all participating schools have access to the modules and strong motivation to incorporate their lessons into subsequent entrepreneurship courses.
The Moot Corp Program: Exploring the Frontier
Entrepreneurs around the world are exploring new economic frontiers and creating the future. They are riding innovation into the 21st century, creating wealth and jobs in the process, while meeting the ever-changing and expanding needs of consumers. Entrepreneurship represents a paradigm shift in business activity as we enter the new millennium.
This shift is having a profound impact on the corporate world as corporations downsize, reorganize and reengineer to become more entrepreneurial. Our best-managed corporations are using the entrepreneurial model to enter new markets, invigorate their organizations, commercialize emerging technologies and continue to grow. These corporations have recognized that the choice is to grow and adapt to the changing environment, or to stagnate and wither. One cannot recognize the choice without clearly acknowledging the only viable option.
Business schools face a similar choice. Business education based on functional approaches and taught by specialists increasingly insulated from market forces and real business problems did not serve us well in the eighties. Clearly this approach is even more inappropriate for the new era. Our best MBA programs infuse entrepreneurship throughout their core curricula and recognize that entrepreneurship should become a major focus of business education.
Riding the crest of this wave into the future, MBA students recognize the value added to their education by this new focus. Students have been electing entrepreneurship courses in overwhelming numbers. A major question facing business schools today is how best to shift entrepreneurship from a peripheral activity into the center and infuse entrepreneurial thinking into the core of MBA education. Business plan competitions, stimulated by strong student demand, are one response to this challenge. But why has the popularity of business plan competitions continued to grow?
Business school educators and education as a whole have become increasingly specialized. Even the traditional integrative course, business policy or strategy, has become a functional one. Entrepreneurship courses in general and business plan courses in particular now demonstrate the quintessential process for integrating the MBA experience. Here MBAs have the opportunity to apply knowledge assimilated and methodologies drilled in other business courses and they are pressed to cobble together a successful new venture. The case method clearly surpasses lecturing as a technique for imparting entrepreneurial skills to MBAs. Writing business plans provides another, parallel process and offers analytical depth. At last, we have a teaching and learning methodology that facilitates MBAs’ focus, study and effort, integrating functional knowledge and performing in-depth analyses, to give wings to their entrepreneurial dreams.
New Name and Focus
The Moot Corp process is a dynamic one that enables the sharing of new venture proposals among entrepreneurs. This approach is instrumental in the continuous improvement of entrepreneurship education. Although still a young institution, the Moot Corp Program is on a global trajectory to entrepreneurial excellence. In 2010, the Moot Corp Competition changed its name to the Venture Labs Investment Competition and repositioned itself as “The Super Bowl of Investment Competition.” We will continue to use our former name, Moot Corp, as part of our tagline for the foreseeable future.
Rob Adams, director of the Venture Labs Investment Competition, explained the renaming as “reflective of the true nature of what Moot Corp had turned into, a forum where MBAs from around the world launch their ventures by raising capital. This competition is far from moot, and parallels the real-world process and realities of developing and launching a venture backed company. This renaming and repositioning aligns the competition with that mission.”
Venture Labs Investment Competition – The Super Bowl of Investment Competition (formerly Moot Corp) is the premier world-wide investment competition hosted annually at The University of Texas at Austin.