Moot Corp® Competition History
"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. Five are still in business,
and they range from low-tech to high-tech:
Ampersand Art Supply manufactures and markets a new surface for artists
called “Claybord™”. It is available in art supply stores throughout the
United States and Canada as well as in Australia, Japan, Great Britain and
France.
Partnerware Technologies develops and markets software to increase the
effectiveness of sales organizations.
Broadcloud.com has proven technology that enables mobile laptop computers,
PDAs, palm computers, digital cameras, and other wireless devices to
transmit image and graphics-rich Internet content over wireless networks
at 56K modem speeds.
Isochron Data has developed wireless technologies that allow companies to
monitor and gather data from their equipment in the field on a real time
basis. The initial application is for vending machines.
Halsa Pharmaceuticals has discovered a material that, when injected into
obese patients by a physician, will generate a rapid, safe and substantial
loss of body fat.
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, one to four 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.
The best-known company to have won the Competition was launched by
graduates from the Wharton School in 1991; they publish The MBA Career
Guide, now the #1 MBA publication in the world in circulation. However,
Breeze Technology, the 1994 World Champion from Australia’s Bond
University, may soon be the most successful venture to have participated
in the Competition. Now called WeWalk.com, the company offers a walking
shoe with a patented ventilation technology resulting in cooler, dryer
feet and utilizes a mass customization manufacturing process.
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.
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.
