mit_impact_full_report

An Evolving MIT Internal Entrepreneurial Ecosystem
52
Undergraduate and graduate students from all five
MIT Schools and twenty-seven departments and labs
have successfully entered the MIT business plan
competitions over its eighteen years. Figure 17 shows
the sources of entrants to the competitions over these
years, with MIT Engineering and MIT Sloan accounting
for the majority. Students from Harvard and other local
schools, as well as non-students, participate, but each
team must include at least one MIT student. Multidisciplinary
teams of technical and business students
have proven to be the most successful competitors.
These teams bring together the skills necessary for
making the bridge between technology and the
marketplace, the same lesson taught in a variety of the
classes, clubs, and programs throughout the MIT
entrepreneurial ecosystem. Panels of experienced
entrepreneurs, venture capitalists, and legal
professionals judge the business plans.
Tracking alumni companies has been one of the
$100K organization’s greatest challenges, even in
terms of how many teams competed and who their
members were, but especially what happened to them
following the competition. We now know that more
than 1,500 plans have been submitted over the years
by more than 7,500 individuals. Figure 18 shows the
number of teams that entered the competition
Figure 17
MIT $10K-$50K-$100K Competition
Individual Entrants
MIT
Humanities
MIT Sloan
Harvard
14%
28%
7%
26%
25%
Other
MIT Engineering
annually, reflecting significant growth of numbers over
time, but also reflecting the cyclical effects of the
Internet boom and bust.
The refinement process of the competition, its
network of mentors, investors, and potential partners,
and the cash prizes awarded have helped many of
these teams to act on their dreams, and build their
own companies and fortunes. Although records are
incomplete and tracking is difficult once the students
are gone, Karina Drees ’07, lead organizer of the 2006
$100K, was able to document 105 companies formed
through the $100K process, of which 22.8 percent
already had successfully exited via IPOs or acquisitions
of the firms, 23.8 percent are still in business as private
companies, 20 percent are no longer in business, and
34 percent have unknown status due to lack of
information. Even if we assume total failure of the
unknowns, the 46.6 percent (or more) of the
companies that have survived or been acquired provide
a remarkable success story compared with companies
formed nationwide. The $100K companies have
received more than $700 million in venture capital
funding. At least twenty-four firms have been
acquired, of which the seven for which we have
figures sold for more than $2.4 billion. The transaction
amount was not disclosed in the other cases.
ENTREPRENEURIAL IMPACT: THE ROLE OF MIT