Final Exam

Can Wharton’s best pass the ultimate VC test?

Even in this dismal job market, a B+ average from Wharton guarantees its MBA graduates a better-than-average shot at a blue-chip career. But a B+ business plan? That will never make the grade. This spring’s Wharton Business Plan Competition, in which 271 aspiring entrepreneurs competed for $45,000 in prize money, proves that in today’s get-real economy, anything less than an A+ plan is sure to flunk out.


That’s the consensus of the competition’s judges — seven senior executives and VCs from such firms as Goldman Sachs; Flatiron Partners; Johnson & Johnson; and Thomas, McNerney & Partners. On a rare sunny day in April, the judges gather in a third-floor classroom of Wharton’s opulent Jon M. Huntsman Hall. (The judges’ names have been withheld in exchange for a chance to spy on their deliberations.) In about an hour, they will announce the grand-prize winner. But first they must administer the VC test. The requirements: a bulletproof plan, a bright and tight message, and above all, an underserved market with a billion-dollar upside.

The rejection process is brutally efficient. Six finalists are dispatched with little or no disagreement. Soon just two remain: Biogenomix is pushing a process that uses therapeutic proteins to enhance blood platelets, which then seek out wounds in the body (unlike pills or shots); Paws is proposing health insurance for pets. Earlier in the evening, during the presentation session, Biogenomix managed to sell the technical merits of its plan without sounding like a scientific journal on tape, thanks mainly to presenter Hari Sundram, a charismatic medical resident. “But he’s not a full-time member of the team,” a judge points out. “The people who will run the company lack deep health experience.”

With that, Paws takes the lead. “They’ve identified an undeveloped market, and that’s rare,” a judge observes. Presenters Nastasha and Chris Ashton report that pets comprise a $30 billion industry in the United States. In the UK, 60 firms insure 10% of all pets; in the United States, less than 1% of pets are insured — by just five companies. This country’s pet-insurance market could be worth $2 billion.

The judges troop downstairs to a wood-paneled atrium that’s packed with smartly dressed students. Paws is pronounced the winner. Cofounder Nastasha Ashton hugs her husband and partner and takes the stage to accept the $20,000 grand prize. She gushes through an acceptance speech. The competition has concluded, but the critics aren’t finished. “I don’t want to be a jerk, but I wouldn’t fund any of these plans,” one judge declares as he surveys the crowd. Which says less about Wharton’s best and brightest — and more about how much the real world is going to expect of them.

Catch up with Wharton’s Business Plan Competition on the Web (

About the author

Douglas McGray is a fellow at the New American Foundation. His last article for Fast Company, "The New Junk Food," appeared in the the April 2011 issue.