An Assessment Methodology for Predicting the Success of Technological Enterprises

Every year thousands of students and budding entrepreneurs participate in technicalbusiness plan competitions in over 44 institutions in the US alone. The stakes are high:over $4 million dollars of prize money and hundreds of millions of dollars of venturecapital are available. The evaluation process takes an average of 4 months to complete asthe technical innovation, business plan, and personal traits of the entrepreneur are put tothe test. How do each of these factors contribute to a winning proposal? Which is moreimportant? How does the entrepreneur’s personality contribute to the success or failureof a proposal? My research investigates the importance of these three criteria (technicalvalue, business management plan, and personality) in the ranking of technical businessplans. Business plan evaluations were collected from five separate universitycompetitions. The statistical significance of incorporating the Jung’s Personality Trait asa measure of entrepreneurial capability was estimated and is presented. The researchfindings suggest that the technical innovation is most significantly related to the proposalranking followed by the management concept and personality type of the entrepreneur. Amultiple-linear regression model was developed to predict the rankings of business plancompetitions using personality type, business value and technical value as theindependent variables. The inclusion and exclusion criteria were specified in terms of athreshold value of the F statistic. The criteria for removal was set at 0.1 and for entry wasset at 0.05. The coefficient of multiple correlation (adjusted R2) for the best predictivemodel was 0.939 for a regression through the origin. The predictive model was used toestimate the semifinalist rankings and to select finalists for a business plan competitionwhose data was not used in the model development. Predicted rankings were highlycorrelated with observed rankings (R2=0.88) and the model perfectly selected the topfour finalists from a group of seven semi-finalists.