Wharton Leaders

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In the fall semester, about 150 teams submit executive summaries of plans for proposed businesses. Judges winnow those down to 25 semi-finalists, who then must submit full-fledged business plans. From the semi-finalists come the eight finalists. The competition culminates each April with the Venture Finals, where the “Great Eight” present their plans to a panel of judges and an audience of their schoolmates. The top three teams receive not only prize money — a total of $35,000 in 2007 — but also in-kind donations of services from Philadelphia-area lawyers, accountants, and business consultants.

Cieri says that professors and staff at WEP like to see competitors start businesses based on their proposals but believe that what students learn from writing and, if they’re lucky, presenting their business plans matters more. “The reality is we see 150 business ideas a year, and those aren’t all going to get started,” she says. “But the educational process is valuable whether the students take corporate jobs, become venture capitalists or start companies.” As this year’s Wharton BPC enters its final phase, the Wharton Alumni Magazine tracked down some of the competition’s top winners from the past 10 years to see where they are today.

For Bennett, of Embrace, business school offered a way to escape the drudgery of a job at a life and health insurance company. Like many students, she and her husband, John Burchard, also WG’03, went to Wharton looking for a new start. During their first year, Bennett met the Ashtons, who were already working with Krooglik, an engineer with database expertise.

By the time the next year’s Wharton BPC rolled around, the team had broken up, partly because of differences over how to divide ownership of the company. The Ashtons stayed in Philadelphia, while Bennett and Krooglik moved to Cleveland, Ohio, where Burchard had landed a job with Progressive Insurance. There, Bennett and Krooglik launched Embrace.

They faced the same obstacles as their former teammates — raising money and finding an underwriter. Their Wharton BPC victory helped with both. “Raising money is a marathon, and the first presentation is the hardest because you have to really think about what investors want,” Bennett says. “The Business Plan Competition made us do that.”

Plus, the experience of pitching to the judges prepared them for the challenge of confronting venture capitalists and other investors, Krooglik says. “You get a first-hand appreciation for what it’s like to stand in front of a room of people and sell,” he notes. “I’ve lost count of how many times we’ve stood up in front of investors, and the questions you get at the BPC are the same style.”

If there’s a key difference between the two audiences, it’s that the Wharton BPC judges give contestants feedback at each stage of the competition. In the real world, investors only offer critiques if they decide to invest. Otherwise, the entrepreneur will hear either a polite no thanks or nothing at all. “Potential investors don’t really tell the truth,” Bennett says. “No one tells you that you have an ugly baby. They always say that it’s not the right baby for them.”

Insurance underwriters are an even tougher audience, she adds. They come from a tradition-bound industry and are paid to avoid risk. (Venture capitalists, in contrast, get compensated for taking risk.) Even so, Bennett and Krooglik managed to land a prestigious underwriter in Lloyd’s of London. “At Lloyd’s, they’re very impressed with credentials,” she explains. “The fact that I was an actuary, that we had Wharton MBAs and had won the competition, all of that mattered to them. It gave them reassurance because they were partnering with a start-up.”

And Embrace, like PetPlan, isn’t without risk. Pet insurance is a promising market — it’s growing at about 20 percent a year — but also an increasingly crowded one. The coverage, long popular in England, has lately begun to catch on in the United States. Embrace estimates that less than one percent of America’s cats and dogs carry coverage, while, in contrast, about half of pets in Sweden do. About 10 companies, all of them small and none with a commanding market share, offer policies in the United States. But more competition is on the way, with Purina, the petfood maker, laying plans to sell policies. Both PetPlan and Embrace believe that, thanks to their unique advantages, they can compete even with a behemoth like Purina. PetPlan has partnered with the leading pet-insurance provider in the United Kingdom, and Embrace has, in Bennett, America’s first pet-insurance actuary.