Should very young entrepreneurs enter pitching competitions, apply for grant funding?
By Daniel Mpala
For some entrepreneurs, pitching competitions have made all the difference in their search for funding, incubation and other resources. But, is it advisable for very young entrepreneurs to enter these competitions? And what about applying for grants? Does this have any benefit for young entrepreneurs?
This was one of the many topics tackled at last month’s Very Young Entrepreneur Education & Acceleration Summit in Johannesburg.
Speaking at the summit during a panel discussion on investment in very young entrepreneurs, Rekindle Learning founder and chair Rapelang Rabana said she’d found pitching competitions useful when it comes to building relationships and getting exposure. This, even though she admits that she isn’t a big fan of such competitions.
“But I can’t say that I personally secured significant resources through those (pitching competitions),” said Rabana.
Her concerns with pitching competitions, she said, stem from the idea that they do not honour what she described as the “organic process of entrepreneurship”.
“It’s almost too mechanical that you can come on stage and pose this idea and you’ll get money without having really travelled the sort of personal journey to really commit to starting this thing, regardless of this pitching competition or not.
“And you find that many of these businesses , even after receiving funding, don’t last more than six months or a year because they were not on an authentic journey,” said Rabana.
‘Part of a process’
Chanzo Capital managing partner and Angel Fair Africa founder Eric Osiakwan, who was also part of the same panel, suggested that there’s a need to look at pitching competitions as part of a process, and not an end in itself.
For Osiakwan, that process of learning and going to a bootcamp or hackathon, is part of an entrepreneur’s journey.
“So, once you see that as part of a process, that’s the mindset you must have. Because if you don’t have that mindset and you think oh, ‘I can just do a pitch competition, win money and get out,’ then, you kind of miss the whole exercise,” he explained.
However, he said while for certain entrepreneurs a pitching competition can help one to advance to the next level of their business, there are other entrepreneurs to whom participating in a pitching competition is not necessary.
“It doesn’t mean it’s not relevant, you must understand what you need at any point in your entrepreneurial journey. And if going to a pitching competition will help you go the next step, by all means do it. If it’s not, then don’t just see it as a routine,” he said.
Good for experience
Another panellist, ThreeArrows Impact Partner founder and partner Sawa Nakagawa, believes pitching competitions are a good way to gain experience presenting to investors.
“It’s always difficult if you’re a first-time entrepreneur to be sitting in front of investors. In a pitch for example, it’s something you can practice,” she said. For Nakagawa, saying one’s not good at pitching is not a “really good excuse”.
“There are so many pitching competitions you can apply for, Anzisha Prize or otherwise. You should do those things,” she said.
She also drew attention to entrepreneurs who move “from one competition to another”. That, she said, is not the kind of entrepreneurship investors want to see. “The ultimate goal is to build a business, not be winners of competitions,” she pointed out.
Grants, helpful or not?
What about grants? Should very young entrepreneurs apply for these?
Rabana described the process of applying for grants as one of the most tedious processes she’d ever been involved in. “I will never take that money again, probably,” she said.
This while Spencer Horne, the founder of autonomous cargo ship startup Cloudline — who acknowledged that grant funding can be an “absolute time-sink” — said he’d found grant money “super helpful”.
“I think if you’re working in the type of risk venture that really doesn’t have a clear outcome to get you started, to get you past the part that is product risk, before you get to market risk, I think that grant capital can be essential. It’s what’s kept Cloudline going,” he said.
Nakagawa added that the ability to secure grant funding demonstrates that an entrepreneur has courage and understanding of themselves, to have managed to put themselves out to get the grant. She believes that’s a positive thing for entrepreneurs.
Explained Nakagawa: “And I don’t think somehow, if you got the grant funding it’s not good for the investors. It’s good because it’s cutting from this stage to that stage where the investors are now able to take market risk, for example, from the product risk, that’s a very positive thing.”
Featured image: ALA vice president growth and entrepreneurship Josh Adler, Chanzo Capital managing partner and Angel Fair Africa founder Eric Osiakwan, ThreeArrows Impact Partner founder and partner Sawa Nakagawa, Cloudline founder Spencer Horne and Rekindle Learning founder and chair Rapelang Rabana