Depending on who you talk to, you get conflicting views about where real innovation and growth come from in today’s economy.
One school, well represented at the established venture capital firms on Winter Street in Waltham or Sand Hill Road in Palo Alto, says that there are only a few truly disruptive technology ideas in each business cycle; that these ideas end up generating most of the wealth and job creation in the technology industries; and that wise investing is mostly a matter of finding the right teams of entrepreneurs with the rare and magical combination of ingenuity and experience needed to build strong companies.
The other school, represented by the dozens of startup incubators, business plan competitions, and angel-investing groups currently popping up across the country, says it’s better to let a thousand flowers bloom, even if they turn out to be dandelions. According to this point of view, there are far more entrepreneurs with good ideas than the established venture-capital business can handle, and the important thing is to find ways to connect these innovators with capital, at least in small amounts, so that they can test their ideas in the market.
Chris Hurley belongs to this second group. He’s the founder and CEO of Revolutionary Angels, a new investing group based in Cambridge, MA. Revolutionary Angels isn’t a traditional angel investing group where members pool their own money to fund startups. Rather, it plans to run a quarterly business plan competition where the prizes—currently pegged at $250,000 for the first-place winner and $50,000 for second place—are financed by entry fees from the competitors themselves. The group began soliciting submissions for its first competition on October 1, and plans to announce the first two winners in November. In return for their fees, Hurley says, entrants will get not just a chance at the big prizes, but enough advice from a group of experienced advisors and service providers that the $4,995 entry fee could be a good investment even for teams that don’t win.
“The pool of people looking to get a business of the ground is growing, while the pool of venture and angel capital available to help them is shrinking, and what occurred to me is that there has got to be a better way to do this,” says Hurley. A longtime sales executive and IT consultant, Hurley was until recently a member of corporate development group at Sun Microsystems. He says he resolved to leave Sun after Oracle announced plans to acquire the struggling maker of business software and servers.
“I decided it was better to control my own destiny than to have someone else control it,” he says. “I’m hoping this is an opportunity that will not only provide that control but help a lot of other entrepreneurs out there, because it’s a challenging environment.”
Despite, or maybe because of, startups’ thirst for capital, Hurley’s model may prove to be a controversial one. The $4,995 fee to enter Revolutionary Angels’ first competition is not inconsiderable to a business in need of cash. Hurley’s plan is to
