The most intriguing story at the Canadian Business Model Competition on Saturday was not so much the team that took home the gold medal as the team(s) who captured silver and bronze.

For the record, Spring Loaded Technology, which is developing a knee brace that adds power as well as stability to the knee joint, captured the Deloitte Smart Launch Award, which comprises $10,000 in cash and $5,000 in consulting services from Deloitte. (Yes, it’s the same Spring Loaded we featured on Entrevestor last week for attracting $100,000 in angel funding.)  As the winners, Chris Cowper-Smith, Shea Kewin and Bob Garrish will compete in the International Business Model Competition at Harvard University May 3 and 4.

But the second- and third-place awards went to a trio of parallel entrepreneurs involved in a couple of projects, which were among the best seen at the weekend event. Purchext, presented by Cam McDonald and Zach Levy, won the second prize of $3,000 cash plus $7,000 in services, while Sage Mixology, presented by Daniel Bartek, placed third, taking home $2,000 cash and $3,000 in services.

But the thing is McDonald and Bartek are both founders of Sage and all three are the founders of Purchext. They’re essentially all one team. And their story is a fascinating tale of ingenuity, camaraderie and success. Not only they did take two podium positions at the Business Model Competition, they will also spend this summer in the Next 36 – one of the toughest accelerators for students in the country. 

The trio of Dalhousie University students has started various businesses over the years. Last September, McDonald and Bartek entered the university’s Starting Lean course with the idea for Sage Mixology, which aims to solve a big problem in the Ready-To-Drink alcohol market.

The problem is premixed drinks are super sugary and give wicked hangovers, mainly because you can’t store alcohol with a natural juice over time. So they have developed a stylish plastic bottle (with patent pending) that comprises two concentric compartments – one for the juice on the inside and another for the alcohol on the outside. The two liquids aren’t mixed until they’re poured, producing an instant cocktail that doesn’t taste prepackaged or give such a nasty hangover.

Sage is now in discussions with possible partners to release their own Ready-To-Drink product in Nova Scotia in the summer of 2014, and they are in the final stages of closing a round of financing with two angels.

Joining with Levy, they applied earlier this year to the Next 36, an accelerator program in Toronto that accepts individual students, then teams them up with people they haven’t met before and has them form a business. All three got accepted, but they didn’t like the idea of being teamed with people they didn’t know.

“I’ve worked on dysfunctional teams,” said McDonald with a shake of his head. “We’ll gamble on a lot of things but we’re not going to gamble on the people we come to work with every day.”

He, Levy and Bartek told the Next 36 they needed to enter all together as a team. The organizers didn’t like the demand so they offered the three Dal students a challenge: go away, form another company, and if it’s any good we might let you in.

So Bartek, Levy and McDonald began to kick around ideas. They soon focused on one that Levy had come up with that would allow teens to use their parents’ credit card and for the parents to control the expenditures. Thus Purchext was born.

Purchext is an electronic system that allows parents (or patrons) to approve a young person’s expenditures on their credit card. If a teen is away at university, the parent can pre-arrange where the student can use the credit card and how much he or she can spend. All of this is done over cell phones, and the student never needs to physically have the parent’s credit card.

The team is already in talks with three merchant acquirers (the financial groups that process card transactions for merchants) about partnering with them. They will receive a Payment Card Industry Certification this summer, which means they have shown security measures commensurate with the financial service industry standards.

And they will further refine the product this summer at the Next 36. The organizers are so impressed with Purchext that McDonald, Levy and Bartek were accepted into the program.