I’m going to say something here that will not be well-received by many in the Charleston startup community: Stop hosting so many entrepreneur pitch contests and stop describing them as, “Charleston’s version of Shark Tank.” It used to be there were one or two premiere pitch events each year. Now it seems there’s a new one every few weeks – and the quality is becoming embarrassingly poor at some of them.
Fast Pitch. Slow Pitch. Wild Pitch. Mad Minute. Perfect Pitch. Rise of the Rest… The list goes on. Enough already. The unique value is gone. You’ve diluted the product into oblivion.
I’m not against pitch events. And I truly understand – as much as anyone – the value these events offer for entrepreneurs and investors. But the proliferation of these begging-for-dollars contests has wrought some unintended consequences, the most alarming being they have become a business unto themselves for some entrepreneurs.
We’ve bred “serial pitchers” who hit every contest in the Southeast circuit from Nashville to Atlanta. They’ve honed their presentations to a high level, sound like the next big thing – and usually come away with some cash or a few lines in the press or social media. But beyond a well-rehearsed pitch, they’ve got a weak product – one whose weaknesses are not readily exposed in a five-minute demo presentation. And the pitch money welfare does more harm than good.
Want proof? I’ve done my share of watching over the past two years and I see some familiar faces at every contest. Here’s the hard truth: If their product was viable, they’d be beyond the panhandling stage. But it isn’t, and they aren’t.
Here’s another hard truth: Good startups build viable concepts and products with demonstrable value and acquire funding the traditional way: By pitching to angel investors, equity or capital partners and/or venture capital organizations. Those organizations do proper diligence and the best startups receive funding.
Yes, the process can be slow, and often harsh: Statistically, only 3 percent of those companies get funded. But this Darwinian process yields the strongest concepts/companies with the best chances of survival in the marketplace.
Want proof? Name one winner of a local pitch contest in the last two years that has become viable. And while you’re furiously Googling an answer, I’ll remind you that last year’s $10,000 Wild Pitch winner and this year’s $100,000 Rise of the Rest winner has yet to make a splash or secure any substantial outside backing – outside of hoisting those big cardboard checks.
In contrast, local Charleston startup PharmRight (who doesn’t troll the pitch circuit) has developed a rock-solid product and obtained almost two million dollars in financial backing from a wide range of South Carolina investors. Their process to fundraising highlights three undeniable facts:
- There is plenty of investment money to go around in South Carolina.
- It is very easy to get your idea/concept/company in front of accredited investors.
- Good companies draw good investments.
From a public relations standpoint, there are two main takeaways:
1. Entrepreneurs – develop and guard your brand image carefully. Smart, viable companies go about their business in a deliberate way. They wear socks. They look professional. They go beyond a splashy demo and have a substance-backed offer. They are taken seriously by investors and consumers as a stable risk. Conversely, companies that scramble at any opportunity for cash or publicity appear desperate, like a tired swimmer who will reach for anything to keep afloat. Desperation is not an attractive trait to investors or consumers. (And neither is being “rad,” “disruptive,” or “bleeding edge” – in and of themselves.)
2. Charleston/South Carolina business community – develop and guard your brand image carefully. Our region is undergoing amazing growth. We’re on the cusp of a technology expansion… Stop cheapening our image by hosting so many amateur hour pitch carnivals. Let’s aim for quality over quantity. Slow and steady wins the race, remember?…. How about you all get together and co-sponsor one or two annual events across the region instead of these iconoclastic events every few weeks? And for heaven’s sake, please stop referring to these events as “Charleston’s version of Shark Tank.” That’s reality TV for the sake of entertainment – just like last year’s “Southern Charm.” And frankly, I think we’re better than that.
For those who want to see a shark tank in Charleston, go to the South Carolina Aquarium. They have a lovely one.