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Two winners left last night’s MIT $100K competition with checks in hand – but both startups have millions of venture capital yet to raise before their ideas become businesses, and they face some uncertainty where the $100K leaves them on their road to that goal.
The MIT $100K business plan competition awarded its top prize, and a $100,000 check, to C-Crete Technologies – a company founded by two MIT graduate students with the nanotechnology for building cleaner, stronger concrete. The company claims its nanoengineered cement reduces by one half the CO2 emissions associated with making concrete.
For the first time, the $100K also awarded a $10,000 fan favorite prize – accepting votes from the audience at last night’s event via text message and Twitter. The winner was Aukera Therapeutics, a company developing a protein treatment for amyotrophic lateral sclerosis (ALS, or Lou Gehrig’s disease).
The $100,000 prize will help C-Crete get started, said co-founder and CEO Rouzbeh Shahsavari, but the fledgling business will need more cash to get to its next step – developing a prototype. “This may help us with the initial equipment that we may need, or elementary stuff,” he said. “We need much more than this for our company.” He declined to say exactly how much the company expects to raise but said the figure will be in the millions.
Aukera CEO Meridith Unger said her company will need $5 million just to get through its pre-clinical work on the potential therapy, then $25 million more to get to Phase 2A.
WilmerHale Venture Group attorney John Chory, who has represented some of the $100K competition’s most notable finalists, including Akamai Technologies Inc. (Nasdaq: AKAM), said he has mixed feelings about what winning the competition can do to a startup’s fundraising prospects.
“I think overexposure is very dangerous when raising money,” he said, since venture capital investors often look critically at startups they perceive as having been on the fundraising market too long.
Polaris Venture Partners General Partner Bob Metcalfe, a long-time $100K supporter, suggested companies may be better off taking second or third place. “It’s generally not the winning company that does the best (after the competition),” he said in a video the $100K organizers screened at last night’s event.
This year’s winner was picked from among six who made it to the final round, out of 28 semifinalists. The competition connected each of the 28 with mentors and networks of potential advisers, investors and customers. Organizer Jarrod Phipps urged them not to let that effort go to waste.
“You should be thinking: launch that company, period,” he said. “You should be using these resources as a momentum to push forward and actually launch.”
Editor's Note: An earlier version of this story misidentified the speaker of a quote about C-Crete's plans. Co-founder and CEO Rouzbeh Shahsavari offered the news of how the company would spend its prize money.
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