If you have a hot new invention or business idea, you could try crowdfunding your business idea through a site like Kickstarter or Indiegogo. However, on a more local level, you could also try pitching that idea through a business pitch contest. Why should you consider taking advantage of a business pitch contest?
Business pitch competition perks
1. You learn the art of persuasion
If you plan to run a business over the long-term, there will come a point where you’ll need to raise capital. This might occur by going through a bank, selling debentures or private equity, or just convincing Uncle Bob to loan you a few thousand bucks. By learning how to get investors on board early in the game, your business stands a higher chance of succeeding.
2. You obtain valuable feedback.
In a business pitch competition, every contestant is provided with feedback on her business plan, revenue model, customer base, etc. Also, the judges ask tough questions about how the invention or business idea and how it will be brought to fruition. Such “tough love” ahead of time improves your business skills and areas of expertise.
3. You gain connections.
Places that host business pitch competitions are typically associated with entrepreneur clubs, business schools, business coaching organizations, etc. These places can direct you to people or resources that will aid you in finding an injection molding service or publisher or cinematographer. You’ll avoid making costly production mistakes in the process.
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4. You step up accountability.
Anytime a business uses public funds, such as by selling stock, it must provide a public accounting of its business activities. In your case, winning a business pitch competition means that you need to return to the host organization and give an update on your business idea success or failure. You may also be tasked with completing set goals in a given time frame. Such accountability measures keep you from endlessly procrastinating on your work or fudging the revenue report.
5. You gain credibility.
Quite often, big grants ride on the coattails of smaller contest wins. If you’re looking to eventually apply for bigger money or just sign up a big name investor/partner, you are certainly helped by having a contest win in your corner.
6. You get money!
Lest we forget, business pitch competitions enable you to get your hands on some sweet cash. Some contests hand out $500, while other contests award as much as $20,000 for your business pitch.
Where can you find a business pitch competition?
Schools of business
Universities with a school of business will often offer a yearly business pitch competition. As examples, the Robins School of Business offers a $5,000 contest purse, and the Connecticut Center for Entrepreneurship and Innovation offers a $10,000 contest purse. Across the pond, the University of Edinburgh offers a £3000 purse.
In some cases, contest eligibility is limited to current or former students of the school. In other cases, you simply have to be a state or area resident.
Chambers of commerce
Cities, towns and even villages have chambers of commerce that award hefty cash prizes in exchange for business ideas that inevitably lead to business growth in those communities. One example includes the Henry and Stark Counties Fast Pitch Competition, which awards an $8,500 purse to existing and start-up businesses. Another example is Swim with the Sharks, a video pitch competition for businesses fewer than three years old.
In general, contestants have to be area residents or businesses.
Often in partnership with a city’s economic development committee or council, entrepreneur clubs host annual business pitch competitions that award several hundred dollars as well as non-monetary perks like free classes, reimbursed filings, etc. Pitch contestants and/or winners may be asked to help out with some of the club’s events or attend a few meetings.
Hackerspaces like Sector67 host a monthly Madison SOUP event where attendees enjoy a meal and donate a few bucks to help fund a community micro-grant. Those attendees who pitch a small business idea and win the cash pot are obligated to return the following month and give an update of their progress.
Most hackerspaces are non-profit entities, so the money that is raised during a contest must typically be used to help the local community. However, if you have an idea that would help your neighborhood, county, city, etc., your area hackerspace could be the perfect place to pitch.
Non-profit organizations often feature pitch contests that focus on creating social change. However, that doesn’t mean that your business pitch can’t benefit from these organizations. If you creatively structure your business idea so that it helps a local cause or charity, you can win some big bucks from the non-profit sector. One example includes Social Venture Partners of Pittsburgh; this organization hosts a Fall Pitch that awards $12,500 to the top winner.
Things to keep in mind
You will more than likely need to create and submit a business plan in order to be seriously considered by contest judges. This is especially true if large amounts of money are being awarded. Here are some instructions on how to create a business plan.
Business pitch competitions, much like crowdfunding initiatives on Indiegogo or Kickstarter, come with the stipulation that all winners are accountable to the paying organization; in other words, winners need to provide one or more updates of their progress. In some cases, the organization may request that the money be returned if funds are misappropriated or not spent as intended.
In other words, be very clear about what you need the money for and then, don’t blow it on something completely unrelated to the original pitch.
Have you ever competed in a business pitch contest? How did it go? Let us know in the comments below.