Most founders take active part in startup competitions, where they pitch to jury members in order to win prizes, and raise funding as well.
If they win, they believe that this validates that they have a great idea and can build a successful company. They proudly display the logos of all the competitions which they have won on their website and believe that these awards will help them to raise tons of money from investors.
After all, the fact that they have won this award in the face of stiff competition prove that they are fundable? Does the fact that they beat hundreds of other startups to win the prize mean that they are better than the rest?
They naively believe that winning these awards will translate into a long line of investors who will fight with each other to give them a cheque.
However, the reality is that raising money is a completely different cup of tea from winning competitions. The judges in these competitions try to be supportive and empathetic, because they’re trying to do their best to encourage entrepreneurs and build the startup ecosystem. This means that their view is different from that of investors, who are looking for a return on their investment.
This is why many founders of prize winning startups get disheartened when they start talking to investors, because they are not mentally prepared to listen to a “No”. While winning prizes is a feather in your cap, just having a clever idea or building a smart product is not enough to create a thriving business. This is a much more complex exercise, and investors will ask harder questions, and do a lot more diligence before parting with their hard earned money !
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