Monica Wheat has a flash drive filled with great startup advice. But if she had to select one sage nugget, it is perhaps this one:
“It’s going to be 10 times harder than you thought,” said Wheat, managing director of Techstars Detroit. “Be ready.”
The challenges of starting a company were a topic Wheat returned to ceaselessly during his conversation with StartupNation, which focused on the value of competitive bidding and how startups can approach financing. Wheat is also the founder and executive director of the nonprofit Venture Catalysts.
“It can take 50 to 100 meetings to close financing, and those are not introductory meetings, just actual meetings,” Wheat said. “That makes it a much more uphill battle that most people are ready for.”
Wheat points out that as financing tightens in the face of rising rates of interest and economic volatility, that hill has grown even larger. And female founders and entrepreneurs of color have at all times had a tougher climb, she added.
That said, Wheat has loads of success stories among the nearly 50,000 entrepreneurs she says have taken part in her various programs. Founders who can mix preparation with perseverance – especially those that have a winning idea – stand the best likelihood.
The presentation process is a key element. Pitching competitions offer 4 foremost advantages:
- Adaptability: “It’s a chance to promote the company,” Wheat said. “I’ll say that I have seen firms’ strategies change with presentations because there you understand what your idea feels like, you understand whether it really works for other people, you meet someone in person and you understand, ‘Does they understand this?’ . You’ll have to see the way it lands.
- Exposure to potential investors: “Some people get funding from presentations. Of course, this doesn’t always happen, but when it does, it really solidifies you as a bona fide company in this ecosystem. This definitely helps attract the interest of a potential investor. This may be someone who wants to engage in a mentoring role, which is usually the first step towards investment. Or maybe you are looking for an investment opportunity, or you have a company that offers good service and you are looking for a new partner.”
- Talent Pool Connections: “There are people out there who want to hire, and maybe even people who you want to hire. People hear something they like and want to learn more, and you make a connection. This is where you learn the value of talent, the value of innovation and things like that.”
- Advertising and promotion: “From a news media perspective, it is principally every thing described above. They will learn an interesting story. Sponsors are an interesting story. The founders themselves have interesting stories. And the movement of the ecosystem itself is an interesting story.
Finally, Wheat points out that the quality of the offer presentation is often as vital, or sometimes more vital, than the quality of the idea or product presented.
“Everyone knows you can have a really great idea but present it poorly and it will fail,” Wheat said. “And you actually can have it [bad] idea, but push it tremendously and then it’ll win.
Wheat said she still remembers being a judge on a panel that, despite her protests, awarded the company a great deal for a product she felt was unsuccessful.
“I was so angry,” she said, laughing. “I’m still furious to this day!”