We have all been to an event where a 50/50 raffle was taking place to raise money for a particular organization or cause, but what if this same style of fund raising was applied to funding startups? Under30CEO, an online resource for young entrepreneurs, has teamed up with the developers of the BizBreak iPhone app to host the Limitless VC Contest. The winner will receive a cash prize including 50% of the app’s revenue during the period of the contest, along with mentoring from five notable entrepreneurs.

Startups can enter by submitting a short video to YouTube describing their company and their plans for spending the possible winnings. Applicants (who must be at least 18) are also required to provide feedback on the BizBreak app (boosting both sales of the app and the contest pot size), which is a gimmicky game that pokes fun at corporate bosses by pitting them in a boxing match against the user. The contest will last 60 days at which point the 8 most viewed video entries and 2 wild card entries will be placed on the contest site for a week of final round voting.

The contest pot starts at $3,000 and will increase with each app sale during the 60 days. After Apple’s 30% cut, 50% of each app sale will generate just below $0.35 for pot, so entrants are encouraged to spread the word about the app. On top of cash prize, winners will receive consulting from five entrepreneurs including Andrew Warner of Mixergy.com, and crowdSPRING co-founder Ross Kimbarovsky. The other mentors include author/entrepreneurs Cameron Johnson and Mike Michalowicz, as well as Yanik Silver, founder of Maverick Business Adventures and the UG6 seminar.

In the true spirit of Under30CEO, at just 19-years-old, the founder of BizBreak, Marshall Haas, barely qualifies for his own contest. BizBreak is actually Haas’ third company in the last two years, having previously founded online automotive parts retailer Velocity Source (a venture he was able to sell) and inVision Projects, an architectural design rendering company.

Unlike the South by Southwest Interactive competition whose finalists we mentioned earlier this morning, this contest just got underway yesterday and applications will be accepted until midnight the night of April 16th. This is an interesting approach to both small business fund raising and to spreading the awareness of the BizBreak app. If the winnings pot is going to grow, however, its going to take a lot of endorsement from the applicants since every thousand downloads will only add roughly $350 to the pot.