Talk about your dream teams. At one end of the table was Bill Hambrecht, the legendary venture capitalist, as responsible as anyone alive for the entrepreneurial flowering of Silicon Valley. A few seats away was Ken Iverson, chief executive of giant Nucor Corp., the Charlotte, N.C., company that has revolutionized steel making. Around them: the creators of some of America's most dazzling growth companies, a group that has taken on the giants of half a dozen industries and forced them to blink.

All that experience was just about to come in handy: these were the national judges of the third annual Entrepreneur of the Year contest, sponsored by Inc., Ernst & Young, and Merrill Lynch, and the tasks facing them this warm August morning were daunting. Separate the unique from the merely unusual. Distinguish the extraordinary from the merely exceptional. Pick the winners -- even though all the candidates you're looking at have survived lengthy regional competitions and have undergone a degree of scrutiny no saint or Supreme Court justice nominee would care to be subjected to.

The process culminating in this day of decision had already lasted several months. By April 22, the deadline for nominations, some 2,700 company builders from all over the United States had been named candidates for Entrepreneur of the Year. Ernst & Young professionals charged with due diligence on the nominees had then fanned out into offices and factories and construction sites. Were the reported financials accurate? Why should this company be singled out for recognition? What were its relations with customers and employees? What were the chief executive's experiences and accomplishments -- and could he or she demonstrate involvement and concern with the community? Soon the list had been narrowed to 1,000 finalists in 37 regions.

Then the regional judges took over. They, too, were a luminescent bunch: a typical panel might have included successful entrepreneurs, a banker or a venture capitalist, and an academic or two. In the American tradition of decentralization, they were free to modify the national categories to fit their region. (The Silicon Valley group, for example, named a Software Entrepreneur of the Year, a category that other regions might have had a hard time filling.) By the time of the June banquets, held in every region of the country and attended by a total of some 15,000 people, the panels had selected 330 winners. Plaques were handed out, speeches given -- and cartons of information about the recipients shipped off to Inc.'s Boston offices for the next phase of the process.

Who were those regional winners? According to Ernst & Young's statistics, they averaged $78 million in annual revenues, with pretax profits averaging more than $8 million. They were in manufacturing and services, in construction and finance, in wholesale and retail distribution. As a group, they created 94,000 new jobs in the past three years.

Members of Inc.'s editorial staff then began winnowing. At that point -- the final cut, so to speak -- it was no longer enough for a nominee to run a growing, profitable company with a record of commitment to employees, customers, and the community. Now the magazine's writers and editors were looking for innovation as well as growth, for bright prospects as well as past accomplishments, for success not just in creating a company but in taking on a chancy or particularly competitive marketplace.

By early August the editors had made their selections of finalists (see list below), and late in the month the judges gathered to make the final decisions.

It was a well-rounded crew. Jim Koch, founder of the Boston Beer Co., was a judge; so were Paula George, founder of The SoftAd Group, in Sausalito, Calif.; and Tom Golisano, founder of Paychex Inc., in Rochester, N.Y. Harry Quadracci of Quad/Graphics Inc., in Pewaukee, Wisc. -- now one of the nation's largest printers -- was on the panel, as was People Express Airlines founder Don Burr. Rounding out the group, in addition to Hambrecht and Iverson, was Dan Garner, national director of entrepreneurial services for Ernst & Young. Inc. editor George Gendron moderated the debate.

And a debate it was. A judge who liked a particular nominee would start things off, making a lawyer's case for his or her favorite. Then another nominee's partisan would take the floor for rebuttal and counterproposal. Back and forth the discussions went, sometimes heated, always engaging, often so evenly balanced that a neutral observer would have been hard-pressed to predict the eventual outcome.

What carried the day for the winners, finally, was a certain extra something, a set of intangibles that the judges felt marked a truly unique company builder.

By lunchtime all the ballots had been tallied. And soon thereafter Inc.'s writers began visiting the winners so they could find out firsthand and report to you exactly why these company builders, among all the accomplished contestants, deserved to be named entrepreneurs of the year for 1992.


THE WINNERS AND FINALISTS

THE ENTREPRENEUR OF THE YEAR

This individual, based on recent achievements, exemplifies company building at its best.

Cecil E. Ursprung and 240 employee-owners, Reflexite Corp., New Britain, Conn.

John J. Kahl, Manco Inc., Westlake, Ohio

Robert J. Paluck, Convex Computer Corp., Richardson, Tex.

T. J. Rodgers, Cypress Semiconductor Corp., San Jose, Calif.

John P. Stack, Springfield Remanufacturing Corp., Springfield, Mo.

THE MASTER ENTREPRENEUR

This individual has demonstrated an ability to maintain management excellence over a sustained period of time.

Herbert D. Kelleher, Southwest Airlines Co., Dallas, Tex.

Charles B. Wang, Computer Associates International Inc., Garden City, N.Y.

THE EMERGING ENTREPRENEUR

This individual exemplifies the start-up process at its best.

Douglas H. Stickney, Quantum Health Resources Inc., Orange, Calif.

Robert P. Freese, Alphatronix Inc., Research Triangle Park, N.C.

Richard P. McWilliam, The Upper Deck Co. Yorba Linda, Calif.

THE TURNAROUND ENTREPRENEUR

This individual has applied management skills to resurrect or reposition a declining or moribund company.

Gregg L. Foster, Elyria Foundry, Elyria, Ohio

Christopher L. White, Mid-American Waste Systems Inc., Canal Winchester, Ohio

THE SUPPORTER OF ENTREPRENEURSHIP

This individual has applied management skills to supporting, encouraging, and facilitating others in the development and growth of companies.

Jean D. Thorne and John E. Hughes, The Coleman-Fannie May Candies Foundation, Chicago

Henry Y. Hwang, Far East National Bank, Los Angeles

Roger V. Smith, Silicon Valley Bank, Palo Alto, Calif.

THE SOCIALLY RESPONSIBLE ENTREPRENEUR

This individual has applied company-building and management skills to community, social, or environmental problems.

David W. Longaberger, The Longaberger Co., Dresden, Ohio

Ben Cohen and Jerry Greenfield, Ben & Jerry's Homemade Inc., Waterbury, Vt.