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We thought the DFJ Gotham $250k competition was huge, squashing the Forbes $100k and MIT $100k. Although a very niche competition, the Global Security Challenge offers $500,000 cash as a prize as well as mentorship from leading venture capitalist firms such as Siemens Venture Capital. Students are welcomed to enter since they are looking for innovators and new technologies from university labs (71% of security startups actually originate from universities). In general, they are looking for technologies that have potential to aid and increase the United State’s security. The “Crowded Places” category offers a $10,000 prize to protect citizens from terrorist threats and doesn’t require a product or prototype.

The competition is open for submissions. Check out the types of technologies they are looking for and visit their site for more information.

Target Technologies

We seek to uncover the creative capabilities of innovators in universities and infant companies that apply to public security needs. This includes software or hardware solutions that help (a) protect people, critical infrastructure, facilities and data/electronic systems against terrorist or other criminal attacks and natural disasters or (b) help governments, businesses and communities defend against, cope with or recover from such incidents.

Examples of our areas of interest are (but are not limited to) biometrics, detection sensors, network security, data storage, video surveillance, RFID, data-mining SW, biotechnologies, and search software.

The majority of startup incubators, such as Y Combinator, require entrepreneurs to give up small percentages of equity in exchange for small amounts of seed financing, usually in the range of $15,000. While they are usually tremendous opportunities to work alongside seasoned entrepreneurs and venture capitalists, it is still questionable whether or not they actually increase the entrepreneur’s chance of success and if it is worth giving up their equity. The connections that are made along the way are valuable, but as these firms take on more projects (Y Combinator has seeded over 80 companies) the returns for entrepreneurs diminish as those resources are spread thinner over time.

Obsidian Launch takes a different approach. Resources are focused for a longer period of time. The entrepreneur doesn’t have to give up any equity either! Well, they do have to give up “phantom equity,” but this it’s not the same. Instead of taking shares, Obsidian Launch takes a percentage of earnings for a specified amount of time. In exchange, Obsidian Launch provides a team of professionals such as accountants, lawyers, and entrepreneurs to accelerate the growth, revenue, and profits of the company that it has undertaken. The success of Obsidian Launch is more closely tied to the success of a young entrepreneur’s company, creating a much larger incentive for the company to make the startup successful. Fewer companies are taken on in a given time period, allowing the entrepreneur to work closer with the firm. (more…)

Aaron Belsh of PhatDeals recently informed us of the winners of the UCSB Technology Management Program New Venture Competition. A total of $25,000 was distributed to five winners in different categories. Taking “Most Fundable Idea” and “Dow Materials Use” categories ($10,000 and $5,000, respectively) this year was Nitride Solutions, a startup developing products used for fabrication of ultraviolet LEDs. These LEDs are sold to companies needing to sterilize medical devices or doing biological detection. The team of student entrepreneurs is comprised of Troy Baker, who is doing postdoctoral work in materials engineering, and David Pricco, who is finishing an undergraduate degree in business economics.

The award for “Best Business Plan” ($4,000) went to Green Pieces, a modular green-home building company that purportedly reduces costs by 15 percent and construction waste by 40 percent while allowing a home to be built in half the normal time. The company has already obtained $500K in funding. Green Pieces, which also won the Audience Choice award ($2,000), is led by Kelly Schmandt who is getting her masters in the Bren School of Environmental Science and Managment at UCSB.

Finally, InFlowMed, led in part by mechanical engineer Alex Williams, took home “Best Pitch” ($4,000) and split the Audience choice award. The company makes software that prevents harmful drug interactions by checking prescriptions quickly for doctors at “point of care” in hospitals. They’re planning to develop their product on EMR (Electronic Medical Record) devices.

All of these companies are incredibly impressive and I look forward to learning more details about their operations and future plans. I’ve been in touch with most of the founders so look out for full profile pieces with more details this week!

iViz is a network security company founded by two IIT-Kharagpur alumni. They provide technology which enables organizations to strengthen their networks against hackers and intruders. Their patented software uses AI to simulate a hacker’s penetration techniques and eliminate human errors. The founder’s Bikash and Nilanjan developed the technology as a project on network security in IIT. When they saw the potential of a business in their project, they entered various business plan competitions to raise initial funds. Bikash also sold some of his paintings to fund their business.

I had the opportunity to talk to Bikash after he had won Conquest-2006, which was a business plan competition held at BITS-Pilani. While I couldn’t make much sense of his technology, I was inspired by his passion and vision. A few days after winning Conquest he incorporated iViz and began taking projects from companies. In a year he won UC-Berkeley’s Technology Challenge and also London Business School’s Asia technology venture competition. Recently Business Today put them in their annual top 10 Indian startups list. (more…)

Over the past 18 years, the MIT $100k Business plan competition has given birth to over 85 companies that amount to over $10 billion in market cap and produce an aggregate exit value of $2.5 billion! It’s no wonder that BusinessWeek has labeled it “the most acclaimed business competition.” Over 1,000 people participating in over 250 teams this year that were narrowed down to 7 finalists. We would like to congratulate Diagnostics For All for taking home the grand prize of $100,000 and CovalentSolar with taking the Audience Award of $10,000.

I just attended the reception and awards ceremony last night and have to say that it was a remarkably inspiring event with companies providing solar energy solutions, cyber security, mobile applications, and ventures that aim to bring health care to third world countries. It’s not only inspiring to see such innovative ideas, but ones that actually have the potential to solve some of the world’s biggest problems. Competitions like these that aid entrepreneurs are not only crucial for entrepreneurs themselves, but are crucial in expediting the commercializing of new technologies and innovation developed in the labs of these institutions. The gathering of these world-class entrepreneurs, investors, and potential investors, creates a unique environment that catalyzes the growth of companies that can open up new job opportunities for thousands of people. The companies that have sprung from MIT have already produced over 2,500 jobs. This might not have been possible without the $600 million dollars in Venture Capital funding that the event help to garner.

Diagnostics For All has a unique technology that has tremendous potential for social impact in health management care. Their service revolves around a simple piece of litmus type paper that is able to diagnose patients for certain diseases by exposing the paper to a drop of blood. Depending on whether the patient has a certain disease or is healthy, the paper will turn a certain color. This makes it easy for any person in third world countries to diagnose patients without needing expensive equipment. It is a big idea because it provides a simple, easy and cheap method for a problem that is currently difficult, inefficient, and expensive. By providing this revolutionary technology the non-profit diagnostic company will provide health care agencies and commercial organizations with a new generation of point-of-care tools to address the diagnostic and clinical management needs of the global medical community. Diagnostics For All may begin to bridge the gap between the difference in health care options and services in the developed world and third world countries through affordability and immediate feasibility.

Zuckerberg just reeled in another $100 million in funding to purchase another 50,000 servers to scale their service. Facebook has been able to grow its active users to over 70 million in the past 4 years with around 109 million monthly visitors. Last month the site attracted 35 million users, a 71% increase from nearly 21 million users a year ago. Recently, the site has been slow because of its fast expansion, so the capital will be used entirely for servers and will bring their total funding to nearly half a billion dollars!

Typically startups (although I wouldn’t call Facebook a startup anymore) have to give up equity for their funding, in this case, Facebook is using debt. They were able to do this through a special venture lending deal with TriplePoint Capital. This type of venture lending peaked during the late 1990’s, but has since been making a comeback. The type of funding is usually used for spending on fixed assets, such as the servers. According to the research firm Data Center Knowledge, they have about 10,000. This is actually peanuts compared to Google that operates at least a million servers and currently adding 500,000 per year. (Business Week)

Every entrepreneur is always thinking about the issue of funding. Running out of money is one of the common reasons why startups with great potential close down. The right amount of money at the right time is crucial. Young entrepreneurs find it even harder to arrange for funds because not only do we not have any considerable savings, our fledgling networks would rarely consist of accredited angel investors.

For the average entrepreneur, self-funding is the most common, but I think it’ll be different for young entrepreneurs. If you either have a business or are planning to start one, how do you plan to fund it? Tell us and our readers!

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During the 3rd day of the Indiana University Innovation Fellows we had a chance to meet with Professor Mark Long. Long has been involved in 68 different ventures, so he shared with us his insights and experiences. One of his focuses was explaining how many startups benefit from incubators.

Incubators are programs designed to accelerate the successful development of entrepreneurial companies through an array networks, resources and services. They vary in the way they deliver their services, in their organizational structure, and in the types of clients they serve. Launching in an incubator dramatically reduces startup costs; rent is set at low prices and resources such as conference rooms and equipment are pooled.  We’ve covered some of the more famous incubators, such as Tech Stars, Launch Box, Y Combinator and DreamIt, which all take a portion of the company (typically between 2 and 12%) for a seed investment. However, the incubators that Long is familiar with are R&D shops that have a different structure.

Long explained that incubators are looking for businesses that have : 1) Business Plan 2) 6 Months Rent in capital (specific only to some types of incubators) 3) Dedicated management team. For more information and to find an incubator near you click here. Keep in mind, you are not limited to your own state. In the words of Mark Long, “neighboring states love to pull companies”.

For those of you who didn’t hear earlier, just under a month ago Kulveer and Harjeet Taggar sold Auctomatic, a free online service for auction creation and management, to Live Current Media for 2.5M pounds (approximately $5M). The two cousins started their business while still undergraduates studying and working in the university student society Oxford Entrepreneurs, a group for which Kulveer served as Founder and President (for networking with OE I strongly recommend creating an account on YouNoodle and joining the group).

Auctomatic began as the internet auction site Boso.com (Buy Or Sell Online), a service for students supported by Oxfords Sad Business School. The site was almost immediately a home run; it grew into the largest online student marketplace in the UK and eventually hit the radar of Paul Graham of Y Combinator, who took them to the US and put them in touch with 19-year-old computer programmer Patrick Collison. The three revamped Boso.com to become Auctomatic, a service that helps businesses to sell goods on online auction sites like eBay and Overstock.com.

The company launched last year with additional financial backing from (more…)

One of our partners, Vator.tv, just released an interesting interview with Tim Draper, Founder and Managing Director of Draper Fisher Jurvetson, a prestigious VC firm. The conversation was centered on the types of companies and their teams that the firm invests in as well as the process. Although the economy is sinking, Draper believes that it is neither a fantastic time like in 1999 to raise money, nor a tough time like in 2002 when VC’s kept close reign over their money; rather, “…the pendulum is somewhere in the middle.” At the same time, changes within an economy usually give rise to entrepreneurs who find opportunities to build businesses. But, what types of entrepreneurs is Draper looking to invest in? (more…)