October 1, 2001
MOOT CORP® Adds $100,000 Pontoon Fund to Prize Chest
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Austin, TX - With the formation of the MOOT CORP Pontoon Fund®, the MOOT CORP® Competition ceases to be moot. From now on, the winners of the fall competition for The University of Texas at Austin MBAs and of the global competition in the spring involving MBAs from around the world will each win the opportunity to receive a $100,000 investment. The MOOT CORP® Competition now has the most lucrative prize of all the university-based competitions.
This investment will be in the form of a convertible note. The note will be converted into the venture’s common stock based on the price the company negotiates with venture capitalists for its Series A funding. As a pontoon bridge is a temporary bridge over a river, this investment is an early stage bridge loan to provide the entrepreneurs time to raise their first major round of venture financing. The name, Pontoon Fund, comes from this metaphor.
An Austin entrepreneur, Steve R. Smith, has committed $1 million to the Pontoon Fund. Smith devised and developed the marketing program for Excel Communications which has been so successful that Excel is now the fourth largest long distance telephone service provider in the country. The Pontoon Fund is structured so that after Smith gets his investment back, a portion of the gains go to endow the MOOT CORP® Program at the McCombs School of Business at The University of Texas at Austin.
“Our goal is that out of the 10 investments that the $1 million commitment will fund at least one or two of these will be home runs. We are following the classic venture capital firm model,” said Gary M. Cadenhead, MOOT CORP® Director.
The Pontoon Fund’s first $100,000 investment has been made in Halsa Pharmaceuticals which won the Texas MOOT CORP® Competition in 2000. Halsa has discovered a material which, when injected by a physician into a medically obese patient, causes immediate, substantial and safe depletion of body fat in that patient. Halsa will utilize these funds to complete its patent application and perform further tests on animals.
“Halsa is the most exciting venture to have come out of the MOOT CORP® process. It has enormous potential and it could well be the venture responsible for endowing the MOOT CORP® Program,” said Cadenhead.
The MOOT CORP® Competition has variously been described as “the Super Bowl of world business plan competitions,” “the mother of all business plan competitions” and “the granddaddy of them all.” Now in its 19th year, it is the original business plan competition and was developed by UT MBAs in 1984. In the last five years, business plan competitions in business schools have become almost as popular as moot court competitions in law schools.
This year, the Texas MOOT CORP® Competition will be held on December 6, 2001. MBAs from 30 business schools around the world will arrive in Austin on May 1, 2002 for the global MOOT CORP® Competition. One entrepreneurial team in each competition will go home with $100,000 to launch its venture.
For information on specific programs at the McCombs School, consult our contacts page. For media information, contact the Communications Director by phone at 512-471-3314 or by email at CommunicationsDirector@mccombs.utexas.edu.
