Early-stage businesses face myriad challenges.
Startup competitions, sometimes known as pitch competitions or business plan competitions, address several: attracting startup capital, building investor and advisor networks, raising visibility in the marketplace, iterating business models and plans, and uncovering new ways to cut business costs.
Directly or indirectly, these benefits all accrue to startup competitors’ bottom lines. And that’s no trivial thing. According to the Global Entrepreneurship Monitor 2015/2016 Report, more than half of all nascent companies that shut down do so due to lack of funding or persistent negative cash flow.
If your early-stage company is looking for new sources of startup capital, a startup competition could be just what the doctor (or business advisor) ordered. In this guide, we’ll examine:
- The ins and outs of startup competitions
- The different types of startup competitions, with examples
- Choosing and entering the right competition for your business
- Getting the most out of your chosen competition – and, just maybe, winning it all
- The pros and cons of participating in startup competitions
What Are Startup Competitions?
Most startup competitions share some common parameters:
- Prizes. All startup competitions by definition exist to reward compelling pitches or business plans delivered by individual entrepreneurs or teams. They virtually award cash prizes to at least one outright winner, and usually multiple finalists or runners-up assigned to size, stage, or industry categories.
- Eligibility Restrictions. Many startup competitions are restricted to specific industries or sectors, such as green technology or consumer software. Some are further restricted by participant identity or geography: Student-only and statewide competitions are both common, for instance. The next section outlines some common competition types.
- Location and Relocation Requirements. Even if they’re not geography-restricted, competitions generally take place in defined locations. Participants are expected to be physically present for competitions’ culminating events, known as pitch days. Some competitions may require participants to be physically present for the entire duration – weeks or months, potentially.
- Network Access. Startup competitions generally provide at least some exposure to subject matter experts and industry leaders, who may serve as advisors or mentors throughout the process. Startup competitions also attract potential investors and partners. It’s quite common for advisors or mentors to invest in promising startups that surface during competitions, provided no conflicts of interest or prohibitions against such activity exist.