I get it, you need to make money on your event or at least cover your costs. No one is asking you not to make money on your event, but you really can’t claim to be a startup event when your price of admission for a startup is the same you would charge a bank, law firm, or investor. You also can’t claim to be open to building the startup ecosystem when you charge $150 to just apply to pitch at your event and you don’t refund the $150 if a startup isn’t selected. Frankly, you shouldn’t be charging at all.
Here’s how a startup founder sees your fees:
- $150 – 2-3 hours of development time on my app or go to an event where I might get to pitch and if I don’t I might meet some investor that may or may not be serious about actually investing.
- $659 – 8-12 hours of development or a month of advertising to test my MVP or rent on my co-working space, etc.
You get the point. You can’t build an ecosystem or claim to be helping to build an ecosystem when you aren’t facilitating startups getting to your event.
Here’s the solution:
Don’t charge startups!
Set some level of free access for startups that have not received funding or have only received a seed round up to a certain level. Welcome them with open arms and setup events where your sponsors that want startups as clients get to teach the startups something and pay for the privilege.
For pitch contests, don’t ever charge an entry and definitely do not charge for applying to pitch. I spent some time last week with a great startup that has customers, has a great product in a lucrative market and they spent the $150 to pitch and guess what, they were turned down. Now, maybe their pitch sucked, but I doubt it. It is more likely that the folks reviewing the pitches had other ideas about what they want. Now the startup has spent $150 and they get to attend the show, but who wants to listen to the other startups pitch. It will be the same ones as the last pitch contest. Yes, they should attend anyway to network, but what are you doing to get investors there? Isn’t a better use of their time to stay in their office building, selling, and marketing their app and reaching out to real investors or should they go network as one of the companies that “didn’t make the cut” to be on stage.
So, while there will be plenty of folks that will invest their money to be there or apply, the fact is that 9 times out of 10, it will be a total waste of their time. Flip the model and start helping startups instead of sucking away their precious time and money. You don’t get to claim you are helping to build the startup system, when you aren’t helping startups.