From coffee roasters to high-tech software, more than 100 companies have been whittled down to 16 with a shot at up to $1 million in funding.

The inaugural University of Auckland Business School Entrepreneurs' Challenge, with $3 million from businessman Charles Bidwill, aims to jump-start the growth of small New Zealand businesses.

Investment committee chairman Brian Hannan said when selecting the 16 companies to undergo extensive due diligence the challenge was looking for businesses with competitive advantage.

"It's easy to get carried away with ideas, but in essence they have to work and they have to be able to earn a profit," said Hannan.

"Looking at these companies, there are people really making a success of current themes like organic food, naturally derived pharmaceuticals, using cellphone technology to link to monitoring and measuring equipment. There are just so many good ideas," said Hannan.

The next stage of the challenge will see the group of 16 reduced to half a dozen companies.

This final group of businesses will be required to pitch to the seven-member investment committee.

The investment committee will be assisted by the BNZ, Ernst & Young, Uniservices, NZTE, Simpson Grierson, and AJ Park.

Hannan said companies that didn't make the cut were often still in the start-up phase, too small or were in a market that was already crowded with much more deeply resourced and competent competitors.

He is encouraging those that weren't successful to reapply for funding next year.

* AllPress Espresso - coffee roasters.
* Cleverscope - test and measurement technology.
* Monitor Business Machines - payment management software.
* Outpost Central - smart water meter technology.
* PhytoMed - herbal health products.
* Pitango - organic ready-to-eat meals.
* Miranda Smith Homecare - home-based care services.
* Truescape - 3D visual simulation technology.
* Author IT - content management and publishing technology.
* Climate Surfaces - powder coating system for MDF, plywood and plasterboard.
* Wine Technology - control and automation technology for wineries.
* The Village Press - olive oil producer and processor.
* Senztec - hot water heating control technology.
* Pacific Helmets - safety helmet manufacturer.
* - business coaching.
* Biomatters - biological research software.