Battle of the Business Plans a new march madness
By Eric Nee

(FORTUNE Magazine) – As everyone knows, some of the most successful technology companies were started by university students. Bill Gates dropped out of Harvard University to join Paul Allen to pursue their software programming efforts full-time. The result was Microsoft. And Yahoo's Jerry Yang and David Filo were Stanford University graduate students when they decided to turn their Website directory into a company.

Given these models, venture capitalists have been scouring college campuses, looking for the next big thing. They've helped colleges create competitions for the best business plan; about 30 universities have such face-offs. This is no academic exercise. MIT's competition produced Akamai Technologies, the Cambridge, Mass., firm that boasts a market valuation of $25 billion. "Colleges have become the farm league for the next generation of startups," says Mark Gorenberg, a partner at Hummer Winblad Venture Partners in San Francisco.

Now Hummer Winblad is creating a worldwide tournament modeled after college basketball's March Madness--complete with Final Four playoffs. The winner gets an unspecified amount of funding. (The model is no coincidence: Partner John Hummer played center for Princeton University in the 1969 NCAA tournament before going on to the NBA with the Buffalo Braves and Seattle Supersonics.)

Here's how it works. Any student at an accredited school can submit a business plan by Feb. 4. The 64 best plans, a limit of one per school, make it into the playoffs two weeks later. Hummer and his partners will choose the 16 finalists, who will then make presentations to Hummer Winblad partners beginning in late February. The Final Four showdown will take place on March 23, with the winner announced the following day.

Since the rules specify only that teams "have an Internet- related business opportunity," the field should be more open than, say, the NCAA tournament. And it's one collegiate competition in which no one will complain about the corrupting effects of money.

--Eric Nee