It seems there’s a new startup pitch competition announced every month in cities all around the U.S. Many pitch competitions are located in the “hot” cities with thriving startup communities while others are held by smaller cities that are trying to position themselves to be the next startup hub.
The truth is, there is a lot to be gained by hosting these types of startup events. The exposure a city gets for being supportive of new business, entrepreneurship, and innovation helps attract like-minded individuals who are seeking a network to help them get their grand idea off of the ground. Ultimately, enticing entrepreneurs to build their business in your city helps the economy grow stronger, brings jobs to the area, increases the demand for housing (great for real estate values), and improves the city’s outlook and optimism for the future ahead.
Although all the excitement, press, and tweets about the various pitch competitions grab your attention, there are a few things you must keep in mind before you consider applying. These are not words of caution, but points of preparation so that your time is not wasted on entering these types of events too early, unprepared, or without proper expectations.
Things to Keep in Mind About Pitch Competitions:
(1) Pitch competitions serve as a pipeline of companies for investors to watch. Many investors are in the audience. Some are prepared to begin an introductory conversation and perhaps pursue a cordial relationship with you…not write a check! The checks that are written at these events are usually the award amount–nothing more. Slow your roll. Investors want to get to know you and your team first before considering investing in your company.
(2) Keep in mind that pitch competition events are helpful in getting your company exposure, giving access to investors who wouldn’t otherwise have known about or been introduced to these early-stage companies, and enabling like-minded individuals to network and build relationships. True investors are always looking for good deals and these types of events are perfect for their interests. Take the time to connect and talk to people during the networking hour, including but not limited to: fellow entrepreneurs, investors, advisors/mentors, and event hosts.
(3) Have a team. More important than having a great idea is having a great team that can help you execute it. Now, this doesn’t mean to rush out naming anyone who will accept the challenge as a co-founder. No, don’t do that. However, you can tap people with certain skill sets and experience levels that could be helpful to the business. They don’t have to officially be co-founders with their names listed on your cap table, but you need at least 2 to 3 other people helping to execute the vision. You need that support in place to be taken seriously in most pitch competitions.
(4) Know your market. Know your numbers. You need to be able to cite the industry facts and specific business metrics for your company, without stuttering. The information should flow in a manner that indicates you’ve done your research and you know your stuff!
(5) Pitch competitions are revenue-generating events for the hosts. For some pitch events, attendees are charged a hefty amount for admission into the event. Although it’s typically free or low-cost for a startup to be a participant, there may be application fees and other fees associated. In addition, don’t be surprised if some host organizations request equity in your company as part of the grand prize.
(6) Prepare for the pitch competition like you would if you were pitching to investors face-to-face. There is certain information that MUST be included in your presentation. One of the most important points that people forget is: HOW WILL YOU MAKE MONEY? You need to be able to describe your business model very clearly. Most of your time should not be spent on describing the problem, but describing how your solution will make money and provide investors with an ROI!
Even if you don’t win, pitch competitions are very helpful in preparing you to pitch your company to anyone, at any time. It’s a great way to practice and get real feedback from your audience of peers and prospective investors.
If you have never done a pitch competition before and have plans on entering one, contact us for more details on our Fast Focus Pitch Deck Consultation.