Accord Could Re-Ignite MIT’s Clean Energy Business Plan Competition
Imagine if the Oscars, the Tonys, the Nobels, and the Pulitzers were all announced on the same day. The individual prize winners, no matter how stellar, might get a bit lost in the glare.
Followers of New England’s renewable-energy sector feared something like that might happen this spring, when local groups conducted not one but two separate high-stakes business plan competitions for teams proposing to launch clean-energy startups. But now one of the groups, the New England Energy Innovation Collaborative, says it may reorganize or scrub its contest in 2008, perhaps restoring the sheen of the remaining competition, the MIT Enterprise Forum’s Ignite Clean Energy (ICE) prize.
On March 10, at MIT’s “Energy 2.0″ conference, NEEIC announced the winner of its first $150K Business Creation Competition, StarSolar Corporation. Seven weeks later, on May 1, the Energy Special Interest Group of the MIT Enterprise Forum of Cambridge handed out five smaller prizes totaling $200,000 to the winners of its third annual ICE competition. Because of the two ceremonies’ MIT connections and the similar amounts of money involved, clean-energy advocates worried that students, innovators, and future potential contestants would mix them up or assume they were part of the same competition.
“I’m afraid we were confusing the market by having multiple competitions, when the most important thing right now is that we bring together the clean-energy cluster community,” says Linda Plano, chair of the 2007 ICE competition and associate director of the Massachusetts Technology Transfer Center (MTTC), a group created by state legislators to help local institutions and researchers move lab projects toward commercialization. MTTC co-sponsored the 2007 ICE prize along with the Massachusetts Technology Collaborative’s Renewable Energy Trust, public relations firm Bell Pottinger, law firm Mintz Levin, real-estate company Cummings Properties, and several other enterprises.
Now Nick d’Arbeloff, executive director of NEEIC, says he agrees with Plano. “From an excitement and ‘oxygen’ perspective, we definitely stole some thunder from ICE and MTTC, and I regret that,” says d’Arbeloff, who explains that the competition was conceived before he joined NEEIC. “I think ICE is a fabulous program. As we look forward, we’ve got some decisions to make as to whether we want to repeat the business creation competition exactly as we launched it in 2007 or whether we want to rethink how to apply those resources.”
Representatives of NEEIC and the MIT Enterprise Forum discussed merging the two competitions last December, but negotiations broke down over the content of the prizes themselves, according to Plano. The NEEIC prize of $150,000, backed by venture capital firms General Catalyst, Atlas Ventures, and Advanced Technology Ventures, took the form of a convertible loan—in other words, cash intended to be converted into an equity stake in the winners’ company at the time of its first funding round. The ICE prizes, by contrast, come in the form of simple cash and services released as the winners hit certain stages in their growth, such as requiring office space and legal representation. “ICE does not do investments—we believe the only string tied to the awards should be about meeting milestones,” says Plano, who stepped down as ICE chair after this year’s competition.
If NEEIC and the MIT Enteprise Forum could try again to find a way around this difference, “it would be great,” says Plano. “A second choice would be to stagger the events. But the main thing is to keep clarity for the cluster. The last thing we need is to add confusion at what is already a confusing time for anyone entering the industry.”
D’Arbeloff cautions that “we have yet to really finalize our thinking” about a possible 2008 business plan competition. One complicating factor: NEEIC is in the midst of merger talks with the Massachusetts Clean Energy Council, a trade group being formed at the urging of Ian Bowles, secretary of energy and environmental affairs for Massachusetts Governor Deval Patrick.
The profusion of business plan competitions—many of them modeled after MIT’s 17-year-old $100K Entrepreneurship Competition—is a distinctive feature of the East Coast innovation scene. “One of the surprises, when I moved from the West coast to here, how much more visible they are,” says Plano’s boss, MTTC director Abigail Barrow. “So, does it hurt to have two business plan competitions in clean energy? Probably not. It brings more focus to the area and generates a lot of student interest.”
But Barrow suggests that it never hurts to try to coordinate promotional efforts across the state’s many technology-promotion agencies. “When I started doing an early-stage life sciences venture conference, I certainly didn’t want to tread on the toes of Massachusetts Biotechnology Council,” which has its own venture forum, Barrow recounts. “So the first thing I did was to go to talk to MBC and position it six months away from their forum.”