MBA students analyzing business plans for investors as part of a national education program are now reviewing significantly fewer proposals than before the economic downturn, said Donald F. Kuratko, the Stoops Distinguished Professor of Entrepreneurship.

The few plans being submitted are tightly focused on solid business foundations and profitability rather than the projected stock value. Potential for high stock value was a popular trend in the late 1990s when technology startups were the rage among investors.

“Before the recession, many plans also were based on the ability to dominate a market, as well as being able to eventually sell the firm for a large profit,” said Kuratko, who also serves as executive director of the Midwest Entrepreneurial Education Center.

“Millions of dollars were poured into companies that later went bankrupt or were sold off at pennies on the dollar,” he said. “Those plans that were attractive in the late 1990s aren’t being touched today.”

Ball State graduate students in the entrepreneurship program began analyzing business plans in 1999 when Beacon Venture Capital started working with the National Consortium of Entrepreneurship Centers, an organization consisting of 80 American colleges and universities with entrepreneurship programs. The organization’s headquarters is based at the Midwest Entrepreneurial Education Center located in Ball State’s College of Business.

Ball State’s involvement came at the height of the investment boom. A record $48.3 billion was poured in 2,469 companies in 1999, Kuratko said.

While the number of business plans submitted monthly for analysis has dropped from 20 to two in the last year, Kuratko believes submissions should increase dramatically later this year as the economy rebounds.

“There is an estimated $5 trillion in private equity money ready for investment around the globe,” he said. “Most people with business plans are waiting to present their proposals to investors when the economy is stronger.”

By Marc Ransford, Media Relations Manager

(NOTE TO EDITORS: For more information, Kuratko may be reached by e-mail at dkuratko@bsu.edu or by phone at (765) 285-5327.)