In March, the tenth iteration of the Minnesota Cup
officially opened to entrepreneurs across the state. The initiative provides mentoring to participants that pass the initial selection phase, as well as financial support for winners. The Cup accepts applications from nascent businesses in seven broad categories, including Food/Agriculture/Beverage, which is new this year and sponsored by General Mills. Melissa Kjolsing, the Cup’s director, ascribes the addition to a massive jump in consumables-related submissions last year. The entry deadline is 11:59 p.m. on May 9.
The Cup’s prize structure isn’t lavish, at least by the inflated standards of the venture capital business. Five of the seven division winners take home $30,000 in cash, with Student and Social winners receiving $20,000 prizes. The grand-prize winner gets an extra $50,000 when the contest wraps up in September. According to past winners, though, the money is almost beside the point.
“Starting anything on your own is difficult,” says Julie Gilbert Newrai, whose PreciouStatus
software won the 2012 Minnesota Cup’s grand prize.
But, she explains, the serial entrepreneurs, business leaders, and technology experts who donate their time as Cup mentors are “genuinely interested in helping [participants] win.” These veterans help their mentees craft better business plans, hone their investor pitches, and connect with potential partners, employees, and investors.
Newrai is careful not to exaggerate how PreciouStatus’ win influenced the company’s prospects, but it clearly helped. In total, she ascribes more than $1 million in direct investment to her company’s post-win visibility. And that’s just part of the “Cup boost.”
As Newrai sees it, Cup participation does three things for entrepreneurs and their teams. First, it raises startups’ profiles within the state—and, by extension, within the national VC and angel investing communities, which are plugged into local startup scenes. Second, it subjects participants to a barrage of questions and criticisms from veterans who have tried, failed, and succeeded, often in quick succession. “You can’t buy that kind of confidence boost,” says Newrai.
Last but not least, Cup participation shapes and strengthens internal culture: Even if they don’t win, entrepreneurs and their employees derive a well-earned sense of pride and accomplishment from their efforts, validating the sense that they’ve built something valuable.
Minnesota Cup isn’t a radical idea. Businesses have long sought mentoring and funding from more experienced actors, after all. But the initiative dramatically simplifies the process for ambitious entrepreneurs who want to put their ideas in the right hands. The application process is digital and requires entrepreneurs to enter just a page’s worth of data. The competition is open to entrepreneurs at various points in the startup phase, says Kjolsing, from “people with good ideas” to principals of companies with $1 million in annual revenues.
Kjolsing echoes Newrai’s sentiments about the relative merits of money and mentoring. The Minnesota Cup “does provide seed funding, but money isn’t the biggest factor,” she says. “The exposure piece is critical.” Exposure, of course, often leads to investment. And the initiative’s list of sponsors reads like a who’s who of Twin Cities business—from United Health to Digital River—making it an invaluable networking opportunity.
Even entrepreneurs who have existing investor and mentor networks? “There’s no reason why you wouldn’t want to enter the Minnesota Cup,” Newrai says.
Sources: Melissa Kjolsing, Julie Gilbert Newrai
Writer: Brian Martucci