Are Business Competitions Good?
| Jan 05, 10 in Entrepreneurship, Startups |  4 Comments |
On Thursday morning I am going to sit down and talk about the GRA/TAG Business Launch Competition at the ATDC/TAG Entrepreneurs Society Meeting. With the kickoff of that and the Georgia Tech College of Management Business Plan Competition "Moving an Idea into a Fundable Venture" event on January 20 it seems like we are starting to move into high gear of the competition race.
Which of course begs the question, are business competitions good for entrepreneurs and startups? The New York Times recently had an interesting article on the subject. As someone who has been involved with these things from both the perspective of a participant and a judge here is my point of view.
First of all I agree with the times article that business competition might be focus a bit too much on telling a good story about their business as opposed to focusing on actually creating a business. They also can steer the focus of a fledgling startup away from what it needs most. Customers.
With that said these competitions are good for three reasons.
- They are wonderful focusing events that require entrepreneurs to think about and do things that otherwise would not have a deadline. If you enter, you have to get the business modeling, business plan, and presentations complete by specific dates.
- If you make it into the deeper rounds buzz and exposure to investors are assured.
- Most prize money comes with few strings attached. Non-dilutive funding is very good and can set a startup up for an angel round.
Like you, I've been thinking about this issue lately. Good points. In the last few years, raising capital often turned too much into a "game". Although I think these competitions are great for the community and schools, they have often grown into such stature that they unintentionally turn raising capital (or starting the business) into a direct win or lose proposition. However, I suppose in this environment, they are now often one of the more valid sources *of* capital in a community.