As we prepare for South By Soutwest (SXSW) I have begun thinking about what constitutes a great pitch event and how we as a tech partner to both SXSW and Student Startup Madness can make it easier for VCs to pull the trigger on a deal. As I was jotting notes I was sent a really well-put article by USC professor Paul Orlando titled: Eradicate the Startup Pitch Event that I agree with for the most part. Saying that I agree with an article whose title is eradicating pitch events while I'm preparing for one of the largest pitch events in the world may seem hypocritical or counter-intuitive, but I promise you that it is not. Paul Orlando is a genius in getting funds for startups and help regions develop FDI strategies. In the article he describes what is wrong with pitch events and he clearly has the experience to make that claim.
Pitch events don't always reward the best business ideas. As Paul puts it in his article, "...we socially reward the cool and sexy instead of the sustainable." Flashy generates excitment (especially in groups) and these events usually result in the winners being those who received the most cheers. However, when it's time to perform due dilligence and the numbers are simply not there investors aren't going to waste money just because an idea temporarily pleased a crowd. Many of the event winners never receive full funding. This is an unfortunate outcome of flashy pitches, poor documentation, and improper due dilligence.
Investors are well aware that many of the flashiest pitches do not translate into sustainable businesses and that is why many pitch events are unable to yield the type of returns that make them worthwhile for anyone other than the host. Luckily, this issue of due dilligence is being addressed by prestigious startup events and conferences like SXSW and Endeaver Mexico are now seeking out technology partners like StageXchange. To have a truly successful pitch event or competition there has to be a clear path to funding or else why bother?
We believe we can improve the position of startups and make it easy for investors to confidently say "yes" at these events. Our platform was designed to reduce vagueness, increase transparency, and provide the necessary analysis and 3rd party validation that will enable investors to make a decision. Everything, from pitch to validation, is contained within our platform. We have case studies that prove we have been able to reduce the time of funding on major ventures from weeks to days because everything needed to de-risk an opportunity is right there in front of the investors.
This is why I feel more optimistic about the future of pitch events. I believe that they can live up to their promise for both startups and investors.
