Industry dinosaurs like me can remember that there was no such thing as a startup pitch competition.
But times have changed: The glaciers have retreated, bipedal mammals have become the dominant life form, and there are now more startup pitch competitions every year than coffee shops near Wynyard Station.
Good for startups, right? Yes and no. Abundance creates problems of a different kind.
Tech startups don’t sit still – they have challenging goals to achieve, a limited runway to hit, and skeptics who are wrong.
If you’re a technology marketer being asked to engage with the startup community, I can see why it seems like a great idea to host or sponsor a pitch competition, but in tough times like these, the best startups may want to don’t even enter your competition, let alone try to win it.
All is not lost. You can increase your chances of a successful startup pitch competition by following these helpful guidelines.
Have a lean, well-documented application process and stick to it
Every extra step in an application process adds time for busy startup founders who would rather raise capital than compete against the odds for a cash prize. The fewer steps (and the less time) it takes from their busy day, the better.
A written application is usually faster to complete than a video application. It takes longer to collect details about financial performance and is more commercially sensitive than other metrics such as customer growth and average customer lifespan. Commercially sensitive statistics may require approval from outside shareholders or approval from a quorum of startup founders before they can be disclosed.
If you don’t follow the application process you’ve published, you’re going to cause frustration and annoyance. Founders never forget the pitch competitions where the “one online form, then one video pitch” process turned into a series of follow-up meetings, with repeated requests for more data and statistics, and a finalist round with twice as many finalists as promised in the application process documentation.
Once you have a process, stick to it because founders will remember it and warn others not to get involved next year.
- How many application phases there are;
- How many applicants in each stage;
- What information is requested; and
- How that information is safeguarded now and in the future.
Publish clear assessment criteria
The most important question when I encourage a founder to enter a pitching competition is, “What are the judges looking for?” and far too often that is unclear. Early stage founders have dragged too much “startup” competition prizes away from a more advanced startup with established clients and revenue, while the competition is aimed at early stage startups.
If you ask someone to give up three days of their time and fly to the freeway to pitch in front of a room of industry peers, only to see a post-Series B company walk away with the award, I’m you not fair and you won get no submissions from the best people.
If you want to appeal to a wide range of startup types, offer a wide variety of startup categories, with their own relevant assessment criteria based on realistic parameters for that category, and offer them relevant prices.
Win many smaller prizes from one big prize, and money is king
Good founders are scammers and it doesn’t take much to determine the odds of winning a randomly drawn prize. When the criteria are broad and the cash pool is largely concentrated on one or two prizes, it feels like a random draw for a savvy founder and they may not feel like playing the lottery today.
You can increase the perceived chance of winning by offering smaller cash prizes for, say, five finalists in each category. It comes with an added bonus: you can actually say you support the industry if you spread the prize value as widely as possible.
Most startups don’t need your help finding good mentors, lawyers, accountants, and publicists. What they really lack is cash to engage with those providers once that first non-cash award ceremony of a three-hour workshop with the service provider is over.
Many things are not the same as cash.
A $100,000 convertible note does not equate to a $100,000 cash prize – it is a debt instrument that can be repaid in cash at a fixed interest rate or converted into shares in the startup at a later date, according to the wishes of the investor. Nor is a $100,000 equity investment a cash prize.
Do not take away their intellectual property
There are some exceptions to the rule, but it is generally unfair and exploitative to take a stake in a startup’s intellectual property (or the first right of refusal in a subsequent round of investment) just because you win them. your pitch competition.
The best startup founders are smart enough to read the fine print, understand and warn the rest of the startup community to stay away from your pitch competition.
It can also ruin your chances of recouping that investment in years to come; when the startup starts raising more capital, an investor may ask, “Why does it? [Corporate Brand X] own 10% of you?” and unless the startup can show that your contribution has been much greater than a cash prize, chances are this is a major speed bump in the negotiations. It can lower the pre-money valuation and in some cases destroy the deal completely.
Bring media partnerships and media exposure
It’s great that a local, state or federal government agency wants to support your pitch competition and it’s great that all those big brands contribute to the prize pool, but if cash is the number one priority for most startups, media attention is the number two priority.
Winning a contest only makes a difference if someone other than the organizer writes about it, and there are many media outlets that are open to your approach if you’re smart enough to negotiate a media partnership to get coverage of your contestants, finalists, and winners. (Hint: you’re reading one now).
And let’s not forget that media organizations are also for-profit companies. If you’re hoping for a media partnership for your awards program, offering to buy some advertising space is a great way to open the discussion.
Some pitch competitions require applicants, finalists and/or winners to share a certain amount of social media from the competition and the brands behind it.
You have humbled yourself and your brand.
Stand in the naughty corner and don’t come out again until you understand why that’s always a bad idea.
No application fees
Just don’t go there unless you’re okay with paying the startups and your audience for their time to attend your pitch event.
Make it diverse
I shouldn’t mention this anymore and yet somehow I still do: include the best non-white male CIS applicants on your finalist and jury rosters.
Far too many startup pitch competitions still don’t do this and make themselves (and the brands they represent) look like dinosaurs.
If you want me to be on your jury and it doesn’t yet include gender and ethnic diversity, I will decline and offer to help you build more diversity in your panel, your audience, your applicants and your organization.
Help your winners with branding
Brand association is a powerful force, and you can really help your startup finalists and winners with framed, branded certificates, a JPG logo they can place in their footer, a photo of them shaking your hand, and a pre-written press release template with a quote from someone senior in your company who helps you distribute for free through your own PR agency.
Stretch Goal: Great video interview with each startup’s team, with their brand as prominent as yours.