Competing teams should consist of at least 2 and no more than 5 degree-seeking students who are enrolled part-time(minimum of 6 credit hours) or full-time in a semester during the competition year. In general, a member of the student team should be CEO, COO, or President of the venture, or members of the student team should occupy 50% or more of the functional area management positions that report directly to the CEO, COO,or President.
The student team must have a minimum of 20% ownership in the venture.
The student team must control a minimum of 51% of the venture’s voting rights. The CBMC organizers recommend maintaining this control for at least 2 years beyond the date of the competition.
Because revenue is often the best form of validation, minimal revenues gained in the process of validation are allowable for the competition. Excessive revenues will be evaluated on a case-by-case basis by the CBMC organizers.
No more than $100,000 will be allowed from friends and family, debt (any source — convertible, venture, traditional),and accelerators. Any convertible debt must be in the form of a standard debt note with a separate agreementspecifying the rules for conversion. Conversion cannot occur for at least 2 years from the date of the competition. NOTE: We do not encourage investment prior to the start of the competition because investment encourages scaling. Premature scaling is a leading cause of startup failure.
Nature of Venture
Ventures cannot be a buyout, an expansion of an existing company, a real estate syndication, a tax shelter, a franchise, a licensing agreement for distribution in a different geographical area, or a spin-out from an existing corporation. Licensing technologies from universities or research labs is encouraged, assuming they have not been commercialized previously.
Ventures may compete in the CBMC only once.