Daniela Papi-Thornton and I have a piece appearing in the Stanford Social Business Review on university-hosted business plan competitions.The gist of it is: These competitions reward superficiality by emphasizing business plans and models (and sometimes taking action) at the expense of deeper understanding that comes from truly knowing your stuff. Knowing your stuff means being as aware as you can of the actual lives of people affected by the problem, what has been tried previously to address it, what has worked (at all), what has failed (and why). And very important: knowing who is taking action now so that you might join them rather than start something yourself.
I've watched them, judged them, and sponsored them. Overall, I'm not a big fan.
Like university-sponsored competitions, it's easy to enter them without due consideration of relevant background knowledge and efforts. On top of this, there are other problems: Winners too often pocket prize money and never pursue their idea with serious intent. Winners mistake winning what amounts to an academic exercise with being ready to execute. Lavish prizes actually undermine attempts at achieving financial sustainability. A high-profile idea often garners prize money from many competitions, and prevents other business ideas from getting support. Polish is confused with substance. Too much time is spent on preparing for small competitions (interfering with the real work that can and should be done).
Happy to share more when my book appears and give you a free e-book on US social entrepreneurship right now.