Ivory tower exercises? Not anymore. College business-plan contestants are all about seducing judges and launching companies.

It's enough to make a seasoned entrepreneur weep: Four M.B.A.'s write a business plan for a company that will make a newfangled smoke detector. Then, on the same day they show it to a venture capitalist in Austin, Texas, they get a check for $100,000. How did the team behind KidSmart Inc. ace the funding game -- in this economy no less? By winning an intercollegiate business-plan competition.

Every fall, hundreds of M.B.A. students, in teams of three or four, begin working with professors to hone ideas for start-ups. By spring, they are groomed in the skills of presentation, armed with 20-page business plans, and ready to take on teams from other schools. Some teams attend just one or two competitions. But others hopscotch from campus to campus, from North Carolina to Hong Kong, for a chance to pitch their ideas to a panel of judges -- seasoned entrepreneurs, bankers, lawyers, and venture capitalists -- who have been recruited by the colleges. All the competitors get valuable feedback. "The judges don't pull any punches," says Jay Ebben, a professor at the University of St. Thomas in St. Paul, Minn., who has been both a competitor and a team adviser. The lucky winners get money -- often quite a lot of it.

In the best of all post-graduate-school scenarios, the winners leverage their ideas into real businesses and shift their lives from student ace to entrepreneurial success. But how difficult is the path to the winner's circle on the B-school biz-plan competition circuit? And does winning one of these competitions have any relationship to achievement in the real world? First things first: What it takes to win is not so different in these contests as it is in business -- a well-timed idea, clever strategy, massive amounts of drive, a great mentor, and, naturally, knowing what the money guys like.

The Road to Moot Corp: Power in the world of business-plan competitions is largely polar -- with the University of Texas in Austin at one end and the University of Georgia in Athens at the other.

UT's prominence stems from its ownership of Moot Corp, the Rose Bowl of business-plan competitions. One of the earliest established, the contest started in 1983 as purely an intellectual endeavor for UT students; launching a company wasn't part of the fun. But as Moot Corp expanded in size and scope, going national in 1989 and international in 1990, students grew more serious about devising truly viable ventures. In 1992, Gary Cadenhead, a senior lecturer in management, took the program's reins, and soon upped the purse to $100,000. With money like that involved, more students sought to compete, UT's prestige rose, and other colleges ramped up or started their own competitions. (An editor from Inc. was a judge at Moot Corp this year.)

A tall man with a deep voice, Cadenhead has created a reputation for himself as elder statesman of the business-plan competition movement. Charles Hofer has pursued a different strategy. Ultracompetitive, intense, respected, arrogant, and in the mix every year, Hofer is the Bobby Bowden of the college biz-plan bowl. The UGA professor coaches his teams to win, and they ooze confidence. "They just plain strut sitting down," says Randy Swangard, who runs the University of Oregon's competition.

KidSmart -- one of Hofer's progeny -- chose as the basis of its plan an idea for a fire alarm that replaces the usual ear-splitting warning with a digital recording of a parent's voice to wake children and direct them during an emergency. Judges were initially skeptical of the plan because it was essentially a one-product company in a market dominated by large players. And at Oregon's Venture Challenge, judge Tim Boyle, CEO of Columbia Sportswear, raised questions about KidSmart's sourcing in Asia.

The team took second place at Oregon, winning $10,000, and by the time they made it to Austin for the big bowl, the KidSmarters had incorporated Boyle's feedback into their presentation. Dressed to win in matching button-down shirts bearing their corporate logo, they affably passed out business cards. And they played a dramatic video from Dateline NBC, which showed that their smoke detector was more likely to wake children than a standard model. The moment was classic Hofer. He drills his teams to make their points dramatic. "There's got to be a story," he says.

KidSmart's story clicked. The plan won the $100,000 grand prize, and just in the nick of time. At a previous competition, a VC had seen KidSmart's plan and offered $750,000 of first-round funding. But the team felt they were better off waiting for strategic funding from an angel who knew the industry. "We labored over the decision and came very close," says KidSmart team member Bruce Black, "but a smart entrepreneur always has a contingency plan, and Moot Corp gave us another option." The partners plan to use the money for additional product development.

"Just being able to compete has helped us tremendously," one competitor says. "It gave us exposure."

Getting in the Game: The growth in interest in business-plan competitions was nicely captured in a moment at the very end of Moot Corp this year when Gary Cadenhead took a minute to introduce some 30 professors from other universities who came to Austin -- courtesy of the Ewing Marion Kauffman Foundation -- to observe Moot Corp. These professors, Cadenhead explained, would return to their campuses and start contests or improve the ones they already run. Some were from large institutions; others were from community colleges. All seemed smitten with the idea of running a mini Moot Corp of their own.

With ever more competitions in the mix, colleges have begun to specialize, offering different wrinkles, rules, and approaches. Oregon is friendly to environmental projects. Nebraska rewards ideas for smaller businesses. Conversely, Rice University's competition focuses on high-capital plans. (Georgia's Hofer exploits the differences between contests by sending different UGA teams to compete in the venues that suit them best.)

To be sure, the professors who went to Moot Corp genuinely seemed at home in the competition's charmingly nerdy atmosphere. But economics are also driving the creation of more contests. A competition can benefit a university's technology transfer program, for example. Professors or Ph.D. candidates in fields such as engineering, agriculture, and the life sciences can pass ideas to M.B.A. students who write business plans. If the plans win contests, the ideas get a little bit of financing plus the marketing advantage of being hailed a winner. "In today's world there is a tremendous amount of pressure on university systems to commercialize technology," says Oregon's Swangard.

Entrepreneurs outside academia -- also hungry for funding -- have been insinuating themselves into business-plan competitions as well. For example, KidSmart's talking smoke detector was not conceived of by Black and his teammates or even by an engineer at the University of Georgia. Instead, it was invented by a Minnesota trademark attorney who found his M.B.A. partners through Charles Hofer's program.

Stephen Spinelli, director of entrepreneurship at Babson College in Wellesley, Mass., estimates that at least 50% of his school's roughly 100 teams have an outside member. "I think partnering is healthy, and we even encourage it," he says. An outside member has more of an incentive to push the team to launch the business after (or while) they work toward their degrees. And for schools, having winners now and actual businesses later can raise the prestige level -- and student applications -- of any program. "Some students have told me they go to UGA because they know it's a machine," says Swangard.

Not Always a Good Thing: As the competitions grow, so does the criticism. Some say the contests overemphasize the value of a written plan. "My gut tells me a lot of entrepreneurs never went through this process at all," says the Kauffman Foundation's Rob Chernow. "In a start-up, whatever you put on paper will change the next day." He adds that Kauffman is reevaluating its funding for the competitions.

Another knock against the competitions is that, with a handful of exceptions like Nebraska's, they favor ideas suitable for venture capital -- even though most businesses do not require institutional money. In the last four Inc. 500 surveys, for example, more than 95% of respondents said they didn't receive venture capital. Yet VCs have been a cornerstone of the judging community and naturally, the plans they reward are those that could theoretically be venture-backed (as of late, biotech is hot). "I'm concerned that they have become more of an investment competition than a business-plan competition," says the University of St. Thomas's Ebben.

"You have a nice Midwest lifestyle business, but it wouldn't play on the coasts," the judge said.

His concern is echoed by Neil Peters-Michaud, CEO of Cascade Asset Management, a company that grew out of a business plan entered in competitions in 1999. Peters-Michaud's plan for a computer recycling company received mixed reviews on the circuit. In the leafy confines of Oregon, his green idea was a runner-up, but at the tech-savvy San Diego State contest, Peters-Michaud recalls being told, "You have a nice Midwest lifestyle business, but it wouldn't play on the coasts." Today, the thriving company has upward of $2 million in sales.

Of course, you can argue that the fact that Peters-Michaud has a solid business is not proof of the judges' blindness but rather, proof that competitions have pedagogical value. "The honest, detailed feedback was invaluable," Peters-Michaud says.

Researchers are just beginning to collect data on the afterlife of competition winners. We may yet discover that the most exciting start-ups today are, in fact, making their debut in college auditoriums. Proponents of business-plan competitions often point to a company called Suppliermarket.com in making that case. Second-year M.B.A.'s Jon Burgstone and Asif Satchu first shared their plan for a software company at Harvard's competition in May 1999. A month later, they secured $8 million in VC financing; by October the company was up and running -- its strategy essentially unchanged from HBS. Soon, Lou Dobbs was interviewing the team on Moneyline. The following year, the fairy tale concluded with Ariba acquiring the business in an all stock deal worth more than a billion dollars.

The KidSmarts of the world can only dream that similar riches are in store for them. But the folks steamrolled by Georgia's teams can also take heart -- Suppliermarket.com's billion-dollar idea didn't win. It came in second.

Burkha-clad Afghan women stitching sexy silk shirts? The unlikely idea led Sarah Takesh to win $25,000 at the National Social Ventures Competition, co-sponsored by UC-Berkeley and Columbia, with finals held in New York. She also placed second at the contest run by venture capitalists Carrot Capital, which means she is eligible for $500,000 more.

Takesh's company, Tarsian & Blinkley, is a fashion house staffed by Afghan women. The 30-year-old Berkeley M.B.A. pays embroiderers roughly $3 a day and tailors $6.25. In Afghanistan, the standard liveable wage is $2 per day. Boutiques in New York City, San Francisco, and Paris will distribute her first line, due out this month. The blouses, dresses, skirts, and jewelry, designed by Takesh, will be priced at retail between $60 and $380. Her plan has the business reaching breakeven in year two. Sales will grow to $1.5 million in year three, she asserts, with margins of 70%.

Takesh's talent with scissors, however, didn't wow the judges as much as her eye for international trade. In January, she explained, the United States declared most Afghan imports free of tariffs. And in December 2002, Congress designated $3.3 billion in Afghan aid, from which Takesh hopes to benefit. "We could tell her attitude was, 'I'm going to make this happen no matter what," says Catherine Clark, of Columbia Business School, who judged at the 95-team competition.

Takesh, whose family is Iranian, says, "I want to see beauty grow in the middle of a wasteland. Feminine beauty in particular -- right in the very heart of the place that nearly obliterated it." Jess McCuan

Literally, the Best Elevator Pitch

"By the eighth floor, the second VC guy started asking questions," George Weinmann says, "but I still had five points I wanted to make and only 24 floors to go."

Welcome to Wake Forest's Babcock Elevator Competition, where students and VCs are stuffed into an elevator shooting to the top floor of the Wachovia Building, the tallest skyscraper in Winston-Salem, N.C. Contestants have two minutes, or 32 floors, to make their pitch.

"It's designed to be stressful," says competition co-founder Daniel Egger. It is: A student with a stopwatch jumps in the elevator too, starting the clock the moment the doors close. In that time, Egger suggests that students explain their product clearly and cover market size. "When we ask, 'Why you?' students are stumped. They think having a great idea would win, but we're looking for the most fundable plan," he says.

Weinmann, a University of Michigan M.B.A., won this year with a plan to market a new kind of generator for office buildings. Boeing engineers, with whom he used to work, developed the technology. His company, ADI Thermal Power, is looking for $3 million in funding and predicts year seven revenue of about $50 million, with gross margins of 50%. Matthew Fogel

An End to Cost Overruns

Eric Hiller, a recent Harvard Business School grad and winner of a $20,000 prize at that school's competition, says his software will help engineers with a perennial problem: determining the cost of a piece of equipment before it's built. In fact, the program spits out cost estimates within seconds.

Michael Cronin, a managing partner at the private equity giant Weston Presidio, was impressed by Hiller's long history with the project. While Hiller was working on his engineering thesis at the University of Illinois, he pitched the idea to John Deere, which later helped fund his research. "His track record relative to what he was doing was really right on," says Cronin. "There's a broad appeal with manufacturers if it works well."

The company, FBC Systems, is now operating out of a storage room on top of an Urbana, Ill., flower shop. "At least it smells good," Hiller jokes. It's also near John Deere's headquarters. Hiller hopes to make his first sale to the tractor maker. Jess McCuan

The Pill That Fills

Dan Burnett is a business-plan competition junkie, having competed in the U.S., Britain, Canada, and even in India. At UC-Berkeley, his plan for a weight-loss company snagged $50,000. TheraNova will create a capsule that, once ingested, swells in your stomach, sharply reducing hunger.

Burnett, who has an M.D. and M.B.A. from Duke University, claims that his pill causes none of the negative side effects associated with its main rival, the IntraGastric balloon. And since it degrades over a week, it's not considered a drug and therefore no federal approval is necessary.

VC and judge Nancy Olson picked the plan over 58 others because she saw "huge consumer demand" for the product. Indeed, Burnett projects revenue of $41 million by 2007, with margins of about 61%.

Of course, he says, he won't hit those targets unless he raises up to $5 million more. The Berkeley win helps. "Winning on the East Coast gets you handshakes," he says. "Winning Berkeley gets you real meetings with VCs. It's a true launching pad." So far, he has met with a dozen VCs, and paid down his line of credit with the prize money. Matthew Fogel

The China Card

Gang Mai is looking for love among China's 200 million cell-phone users. His plan for a mobile phone dating service beat 30 teams to win $10,000 at UCLA, where he attended business school. His XieHou Entertainment Inc. will have a market-ready product and deals with Chinese carriers later this fall.

Though XieHou will face intense competition, judges often favor international ideas -- and these services are already popular in Japan. Judge Bud Knapp hailed the market as "new and largely untapped." "We are going to be the first generation of serious entrepreneurs in China," Gang adds.

Of course, being first can be bad. Gang would like to raise $1 million more, but finds VCs wary of investing in China. So he is now shopping it to Chinese-born entrepreneurs in Silicon Valley. Matthew Fogel

Heard From Your Fuel Tank Recently?

Yale's contest does not require teams to have current M.B.A. students -- just that one team member be associated with the university. And so it was that Anthony Uzzo, a local utility engineer, came out on top this year, winning the $12,000 first prize.

Uzzo's team of eight hails largely from the energy industry, though it does include one Yale employee and one alum. Their winning plan is for a company that will make monitors that float inside residential fuel-oil tanks, sending readings to dealers so they know when to refill them.

Uzzo says it's a $750 million market. Judges liked the sound of that -- and that eight monitors have been beta tested. Uzzo's team also stood out in the field of 30 because it had poured $20,000 and 10,000 hours into the project. "When an entrepreneur is already risking his own capital, you feel better about risking yours," says VC judge James Nahirny. Jess McCuan

It Worked in Europe, Why Not Here?

An ailing cat named Bodey inspired the grand prize plan at the Wharton School. Bodey's British owners, Wharton M.B.A.'s Chris and Natasha Ashton, knew pet insurance was popular in the U.K., but when they came to the U.S., they found few companies that offered policies. So the couple teamed up with an actuary and a veterinarian to form their own pet insurer.

Contest judge Karen Boezi, of the biotech investment firm Thomas, McNerney & Partners, was impressed by the team's thorough market research, including surveys of prospective customers. She also liked that both Ashtons had taken temp jobs at a veterinary hospital to better learn the price of pet care. Their win "was the combination of the domain expertise within the group, plus all this legitimate data -- and they'd proved that pet insurance had been successful in the U.K.," says Boezi.

CFO-to-be Laura Bennett estimates they'll need around $1 million in capital and a firmer deal with an underwriter before the business, Fetch!, begins selling dog and cat policies in early 2004. Snakes, rabbits, and iguanas will come later. "You need to build a base of policies first," Bennett says. "After that, we're expecting our profits to be very healthy." Jess McCuan

An Inventor Gets in on the Action

For years, futurists have been saying that drugs will one day be as tailor-made as a Savile Row suit. Amber Ratcliffe is set to exploit what she calls this "new world of personalized medicine."

Her business, NanoString, is developing a device that scans samples of blood or tissue to identify various genes that may cause diseases. Doctors can use the device -- invented by Krassen Dimitrov, Ratcliffe's former boss -- to prescribe the ideal drug for a patient.

Business-plan competition judges love ideas that have a certain epic quality, which no doubt helped NanoString sweep to victory at the University of Washington, and place third at Purdue -- winning more than $50,000. But one team member has since quit the project, taking half of the money. What's left is paying Ratcliffe's salary.

The competitions provide more than cash, anyway, Ratcliffe says. Contests impose a timetable for completing research and writing a plan -- deadlines that give the start-up process extra momentum. "Just being able to compete has helped us tremendously," she says. Plus, "it gave us exposure to VCs, lawyers, and other businesspeople." Matthew Fogel