Pitch competitions: A new avenue to start-up funds
Communities are finding creative ways to fund and run these dynamic competitions.
Have you got a great business idea but not enough money to get to the next level? If you participate in a business plan or pitch competition, you might be able to win $5000 or more. These seem to be catching on around the state, with Grand Rapids (5 x 5 Nite, Dolphin Tank), Lansing (the Hatching), Traverse City (Boost), Detroit (Hatch Detroit) and even East Jordan (Green Light) hosting competitions of various prize amounts.
The most important ingredient in winning one of these competitions is a well-thought out business plan. Since participants must convince a panel of judges that they have the most viable business idea, it is crucial to have thought through every aspect. And ultimately, the business plan is essential for any business to do well, so even if you don’t win the money, you’re further ahead!
To participate, the competitors put a description of their business idea in a public website, where anyone can go to vote on their favorite ideas. In the case of 5 x 5 Nite, the five ideas who get the most votes will get 5 minutes to pitch their idea to five judges, and the winner gets $5,000. In this case, it’s helpful to have a large social network to encourage voting for your idea. The actual pitch night competition is also open to the public and the winner is announced the same night, which creates a lot of excitement. Competitions are sometimes limited to those living within a certain geographic area or region.
Usually, a corporate sponosor provides the prize money, and those sponsors get to select at least some of the judges. An organizing entity might be an economic development organization or an entrepreneurial support organization, and they can host the website and do the marketing.
The value of these competitions extends beyond someone winning some start-up money. It provides valuable experience in telling about an idea, which will usually lead to learning how to describe it even better. It provides validation of that idea beyond family and friends to the larger community. It provides exposure to an audience which may include investors or potential partners. It can also provide connections to local support programs for entrepreneurs.
The MSU Product Center, in partnership with Michigan State University Extension, provides business counseling for product development, packaging and marketing strategies that will help Michigan entrepreneurs commercialize high-value, consumer–responsive food, value-added agriculture, and natural resource products. For more information, visit the MSU Product Center website or call 517-432-8750.