How I Leveraged Pitch Competitions to Raise $500K
From our recent ‘Friends and Family’ virtual event with Nichelle McCall Brown
Friends and family play a vital role in a founder’s life. Not just for the emotional support they provide, but also the financial support. There is a general expectation that a startup should be funded through friends and family in the early stages, but that is simply not realistic for all founders, especially those from diverse backgrounds. For instance, the net worth of a typical white family is nearly ten times greater than that of a Black family, according to 2016 data from the Pew Research Center.
Grasshopper Bank and AWSM share a commitment to leveling the playing field and providing more founders with the support, information and connections they need to excel in their startup journey.
Given the current economic climate and record unemployment rates, entrepreneurship is a path considered by more and more founders. We hence created a new event series called “Friends & Family” which is focused on capital at the earliest stages. We explore different paths to funding, the pros and cons and how to best pursue them.
For our first virtual Friends and Family event we sat down with our guest, Nichelle McCall Browne, CEO of Bold Startups, an organization which aims to help entrepreneurs grow six figure businesses by accurately identifying their correct paying customer early on — a task a surprising amount of founders tend to miss the mark on. Nichelle opened up about how she successfully raised $500K by leveraging pitch competitions, offering insights from her own experience, tips for success, and fielding audience questions. Read on for key takeaways from this inspiring conversation or watch the video for the full conversation.
Do your research — thoroughly!
Nichelle has participated in a lot of pitch competitions, but she didn’t apply for all of them right away. Her step by step approach began with understanding the challenges of her customer, then building out a minimum viable product (MVP) in an accelerator program, doing the work needed to be able to show traction, then extensively researching the pitch competitions she might want to apply for. Nichelle told us, “Applying for pitch competitions and raising money can be a full-time job, so you really want to make sure that you’re using your time effectively”. She suggests that entrepreneurs research the portfolios of the funders they hope to win money from to see if they have businesses in their portfolio that are similar to your own. Check out who’s previously won the pitch competitions you’re interested in. What stage of growth were they in and what traction were they able to show? It’s also worth taking a look at the diversity of the companies who’ve won. Nichelle mapped out all of the pitch competitions throughout the year that were a good fit for her business, from when the applications were due, to when she could expect to hear back. Bottom line — be prepared.
Find your story’s “sweet spot”
“The fun thing about applying to pitch competitions is that they limit you by the characters that you can share,” says Nichelle. While not every founder will find it fun, there’s no doubt that it’s a very good exercise to learn to get your message across clearly and concisely. Having raised $500K through leveraging pitch competitions, Nichelle is uniquely positioned to help founders understand what investors want to hear about. She says, “You want to share your story of traction”. Nichelle suggests that you start with who you are, what problem you’re solving, what makes your solution unique, the traction you’ve had, and your team’s go-to-market strategy. At a pitch competition, you typically only have five minutes, so you need to give the highlights. Nichelle shared her “don’ts” with us as well — Don’t get too technical, don’t be afraid to admit what you know you need, don’t share the “secret sauce” that makes your company unique and don’t forget your numbers! Make the most of your limited time in front of the judges by being honest and intriguing them enough that they want you to elaborate once you’re off the stage.
“Traction” can be defined many ways
Depending on factors like what you’re building, the funding you’re starting with and your technical prowess, traction can look very different from entrepreneur to entrepreneur. As a non-technical founder with an idea to build a software company, Nichelle knows firsthand how to showcase traction when you don’t yet have a product on the market. She shares, “Identify your target market and get out and survey them. Talk to one hundred people minimum. Ask about their biggest challenge, how it impacts them, what their goals are, and set up interviews to go deeper”. If this sounds too qualitative to you, first remember that you’re pitching to a panel of judges who all have different thoughts and experiences. Finding ways to bring both qualitative and quantitative data to the competition is smart. Second, signals of intent from over one hundred prospects is a very valuable metric in lieu of revenue. Signals of intent can also come in the form of people using your app or signing letters of intent. Don’t discount your own traction just because it hasn’t put money in your pocket — yet.
Repeat after me: “All feedback is actually good feedback”
Not every experience feels rewarding. Perhaps you lost a pitch competition or the judges wanted to see revenue, or you asked for explicit feedback and didn’t get it. Remember that the value in pitch competitions goes beyond winning — you get great practice and exposure, meet other entrepreneurs, and even investors. The work you do to understand your customers will help you avoid missteps in the product you build. In fact, Nichelle says, “Focus on getting the right paying customer. I’m telling you, that’s huge. That’s going to just make your product more successful, your business more successful, generating revenue more successful”. And the feedback you want as a founder sometimes comes in subtle ways, such as learning to see the pattern of questions you’re asked as you pitch more and more. Nichelle says, “I pitched. I got some funding, but I leveraged that to then actually raise the majority of that $500K”. Importantly, she also made space and time for herself to disconnect so that she was ready to receive that feedback. It helped Nichelle to realize that “…the feedback is about the business. This is not about you or your own self-worth or your own value. Be able to separate the two and just continue to move forward and push forward in that”.
We often see the success of others without recognizing the work it took behind the scenes to achieve it. Raising $500K through leveraging pitch competitions seems like a dream. It’s also a big undertaking. Most importantly, it’s also well within reach of any founder willing to put in the work. Nichelle wrapped up our conversation with some words of encouragement, “Kudos for even getting started. Sometimes it can be a very scary place to kind of be going into the unknown, to be following a passion and creating something new. So, just kudos for even starting that journey”. We’re very grateful to Nichelle for demystifying her experience for our community.
Please join us next time as we welcome Chante Harris, David Scatterday Treviño and McKeever E. Conwell, II to discuss the numerous tax incentive and economic development programs that can help companies reduce burn rate, conserve cash and leverage partnerships, as well as the challenges a founder needs to be mindful of. This virtual event, How founders can tap into public funding opportunities, will begin at 4PM EST on August 6th. We hope to see you there!
