Monica Wheat has a thumb drive full of excellent advice for startup companies. But if she had to pick one nugget of sage, it might be this one:
“It’s going to be 10 times harder than you thought it was going to be,” said Wheat, the managing director of Techstars Detroit. “Be ready.”
The challenges of founding a company was a theme Wheat returned to often during a conversation with StartupNation, which focused on the value of pitch competitions and how startups can approach funding. Wheat is also the founder and executive director of the nonprofit Venture Catalysts.
“It can take 50 to 100 meetings to close on funding, and that’s not intros, that’s actual meetings,” Wheat said. “So that makes it much more of an uphill battle than most people are ready for.”
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Wheat points out that with financing getting tighter amid rising interest rates and economic volatility, that hill has grown even steeper. And women founders and entrepreneurs of color have always faced a harder climb, she said.
That said, Wheat has seen plenty of success stories amid the nearly 50,000 entrepreneurs she said have gone through her various programs. Founders who can combine preparation with perseverance—especially those with a winning idea—have the best shot.
The pitch process is a critical element. And pitch competitions offer four main benefits:
- An opportunity to adapt: “It’s a chance to put the company out there,” Wheat said. “I will say that I have seen company strategies change from pitch events, because there you understand how your idea sounds, you understand whether it works for other people, you face someone live and understand, ‘Do they get it?’ You have to see how it lands.”
- Exposure to potential investors: “Some people get funding from a pitch event. That doesn’t always happen, of course, but if it does it really solidifies you as a bona fide company in this ecosystem. It definitely helps getting a potential investor interested. That may be someone who wants to get involved as a mentor, which is usually a first step toward investment. Or maybe you are there looking for an investment opportunity, or you have a company that is a good service, and you are looking for a new partner.”
- Connections with the talent pool: “There are people there who want to hire, or maybe people you want to hire. People hear something they like and want to learn more and you connect. You get to know the value of the talent here, the value of the innovation here, all that kind of stuff.”
- Publicity and promotion: “From the news media standpoint, it’s kind of all the above. They get an interesting story. The sponsors are an interesting story. The founders themselves are interesting stories. And the movement of the ecosystem itself is an interesting story.”
Lastly, Wheat points out that the quality of a pitch presentation is often as important, and sometimes more important, than the quality of the idea or product being pitched.
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“Everybody knows you can have a really great idea, but present it poorly and then it fails,” Wheat said. “And you can have a really [bad] idea but push it amazingly and then it wins.”
Wheat said she still remembers being a judge on a panel that, over her protests, awarded a company with a great pitch for what she was convinced was a loser product.
“I was so mad,’’ she said, laughing. “I’m so mad to this day!”
