This is an interesting spin on the business plan competition. An angel ‘investment’ group in the USA (Cambridge, MA) is proposing to run a business competition where the entrants “pay to play” and thereby fund the investment pool. The organiser of this venture says:
“…entrants will get not just a chance at the big prizes, but enough advice from a group of experienced advisors and service providers that the $4,995 entry fee could be a good investment even for teams that don’t win.”
Is this a good idea? Should start ups really be investing their limited financial resources in entering business competitions?
I think this investment group has very limited experience in marketing!
Paying for the advice of an experienced, savvy and well-connected entrepreneur / business angel to review / improve / accelerating one’s business is a worthwhile expense.
There are plenty of so-called advisers that would be delighted to take $5k from any aspiring entrepreneur.
From the angel’s perspective, they do receive plenty of business plans that are poor quality, immature or unsuitable for angel investment. So some form of financial barrier will self-filter entrants and eliminate frivolous applications.
$200-500 entrance fee would be acceptable. As a former entrepreneur, I would want to see guaranteed face time with a competition ‘judge’ to justify the $5k expense.
Go back to the drawing board, Revolutionary Angels, and improve your pitch!