U. Mich Wins LBO-Hosted B-Plan Contest

Sponsoring business plan competitions has proven a great way for venture capital firms to do some good for graduate students, generate positive PR, and discover budding entrepreneurs. Now positive PR-starved LBO shops are discovering the virtues of such contests as well.

This Friday, Knox Lawrence International LLC, a six-year-old buyout shop with close ties to Africa, announced $15,000 in prizes for the top three contestants in its inaugural MBA Africa Business Plan Competition.

The $10,000 top prize went to the four-person team from the Stephen M. Ross School of Business at the University of Michigan. Their idea: to start a company in Mozambique that would cultivate the plant Jatropha (and train local farmers to do the same), then process its oil-laden seeds into raw oil that could be sold to bio-diesel refineries.

In a press release Knox Lawrence said the “winning team will be considered for additional seed financing.” Winning team member Tony Gross, delivering the acceptance speech on behalf of his group, seemed game. “We’re looking forward to that next check, and moving to Mozambique,” he said. The company’s proposed name: Mozergy.

Knox Lawrence launched the competition this summer, inviting first-year and second-year MBA students to develop business plans along the theme, “Microfinance in Sub Saharan Africa.” It promoted the competition at some 12 to 15 business schools across the country, according to Kenneth Globerman, chairperson of the competition and a vice president at Knox Lawrence. About a dozen teams submitted entries, and the seven-member panel of judges eventually narrowed it down to three finalists, who delivered presentations on Friday.

The team from Haas School of Business at University of California, Berkeley was named winner of the second prize of $3,000. Their business plan involved setting up a network of micro-lenders in Africa to enable the compilation of data, which could then be used by outside creditors to assess the transaction history and credit-worthiness of micro-lenders. The plan also involved enabling borrowers to conduct transactions via cell phone, a move that would help micro-lenders cut costs and charge lower interest rates.

The team from Columbia Business School (third place, $2,000) proposed starting an electric utility company to provide seller-financed solar panels to Africans living in rural areas. In some locations only 2 percent of the population has electricity in their homes, and many of those that do find the service unreliable, the team said.

Based in New York, Knox Lawrence acquires IT services, energy services and other services companies. Its two managing principals, Nana Baffour and Johnson M. Kachidza, grew up in Africa.