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Throughout history, businesses have been born and thrived through competitions and awards. Most famous is perhaps the yearly international Nobel Prizes that recognize advances in culture and science to the amount of $1.46 million dollars. There is also NASA’s Centennial Challenges that gives out awards up to $2 million during technology competitions. Although time consuming, these types of recognition prizes are great sources of free income and capital if one can put in the work. In addition to free sources of income and capital, participation in competitions can serve as a great form of market validation when raising capital from private investors. Private investors are constantly requiring startups to have received more and more proof of concept in regard to the market actually wanting their product. Unfortunately, many good ideas go unfunded because the amount of capital required to obtain market validation or proof of concept is too high and investors are unwilling to invest in a risky idea without any market validation. By winning a competition, a startup not only gets some much needed capital to work towards their proof of concept, but they receive market validation via credibility through the award or competition that was won.
One form of competition that many startups undertake are business plan competitions. A large majority of business plan competitions are found at Business Schools and are only open to students, or alumni members. However, with some investigation on your part, there are still many contests that are open to the best winner. Research your industry and state competitions, and be sure to prepare your business plan.
An additional form of competition that startups should be participating in are put on by angel groups, venture capital groups, and entrepreneurial support groups such as incubators and accelerators. In addition to gaining prize money and market validation, participating in these types of competitions can often and usually does lead to receiving actual capital from investors. Many of the angel and venture groups that put these competitions on are doing so in order to experience deal flow.
Lastly, competitions are often put on by departments of the government, non-profit organizations, and industry leading companies. The majority of these competitions are intended to drive innovation. Many governmental and non-profit organizations seek to uncover innovations that have direct social benefit while large, industry leading companies seek to uncover innovations that solve a major problem or money saving solution in the industry.
1. Government Challenges is an online platform created by the U.S. General Services Administration to tackle pressing challenges in the nation while promoting innovation.
2. The New York Times has a constantly updated list of business competitions on their website:
3. BizPlanCompetitions keeps tabs on “the most promising, legitimate entrepreneurship contests and business plan competitions occurring anywhere in the United States, and soon in Canada too. [They] catalog them, map them, put them on a calendar, and blog about them.”