Let people who are not employed in HE submit applications
That's it. Judge the ideas on basis of merit, not where the applicant is employed at the time.
I completely agree with this. If non-uni employees are able to bid for this, there are also serious efficiencies to be gained in not paying extravagant buildings and estates charges too.
Furthermore, having worked with I am sure students themselves, I am absolutely sure that some of our best students would also relish the chance to have a go at implementing some great ideas start-up bootstrapping style. And wouldn't that look amazing in terms of demonstrating their personal skills set too?