Take a measure of citrus juice, add vodka, ginseng, caffeine and a variety of secret ingredients, and you've got a tasty energy drink — and the winning entry in the University of Louisville's 10th annual New Venture Competition this month.
The drink is called Rhythm, developed by RJS, a primarily student-run company. Now the goal is to transform the classroom project into a profitable enterprise, said Joel Adams, one of business's founders.
With $24,500 in prize money for development, "we are absolutely planning on launching this thing," Adams said. The company still needs to get federal approval for its drink formula and to line up more financing, he said, but it has a commitment from a local distributor for an initial order of about 240 cases.
The participants, who came together to devise an entry for the competition, at first considered marketing a new port-like wine, then changed directions and focused on an energy-drink formula, said Stephen Herron, another member of the student team.
Mixing energy drinks, such as Red Bull, with alcohol has gained popularity in recent years, especially among younger adults, Herron said.
"We saw that opening in the marketplace and thought, 'Wow, a lot of folks are making a lot of money off this mix of drinks. Why don't you put that combination together and present to the market a better-tasting drink?' And that's what we think Rhythm is."
The U of L competition isn't aimed primarily at launching new businesses, said Van Clouse, a professor of entrepreneurship at the university. The goal is to show students what it's like "pitching a business concept" to investors. "Our judges are all either angel investors or venture capitalists."
The contest has occasionally given rise to successful businesses, Clouse said. "The most recent one that did well was Neuronetrix," a Louisville biotech start-up that makes a diagnostic system for Alzheimer's disease and related neurological problems.
"We also have a couple of our teams from a few years ago that are still in the formative stages, seeking investment capital," he said.
RJS would need at least $5 million to market Rhythm nationally, but could roll it out regionally for about $450,000, Herron said. The company quadrupled its initial $8,000 New Venture prize by agreeing to invest the money into the company, and received a $500 prize for presenting the best quick summary of the business plan in the "elevator pitch" contest.
The company could win more money in regional, national and international competitions that will be held next year. U of L has sent 46 teams to those contests, reaching the finals 20 times and winning four of them.
"We are just as excited to go and compete" with schools such as Yale University and Massachusetts Institute of Technology "as we are about our product," Herron said. "It gives us an opportunity to match our wits with theirs."
The RJS founders are "really a unique combination of the talents needed to launch a new beverage like Rhythm," Clouse said. "They have the experience in the distilled-spirits industry. They certainly understand the culture that they are appealing to."
The New Venture Competition is sponsored by Aleris Rolled Products, formerly Commonwealth Industries, and received additional support from members of the College of Business Entrepreneurship Council.
In addition to Herron and Adams, the RJS founders include Sara Babbitz, Greg Bernard, Robinson Brown and Jeff Freiberger.
