A conversation with John Dmohowski, Director of Client Services for PortTech, a clean technology incubator and commercialization center based in Southern California.
The proliferation of incubators, accelerators, boot camps and professional services dedicated to helping startup teams prepare to impress investors has fueled the growth of pitch events and competitions. But are these events worth the time and effort expended by participating founding teams? Do mentors and coaches who freely donate their time and expertise make a difference? Do investors really find companies or business models that they wouldn’t otherwise discover?
We think pitch events are worthwhile for founders; greatly improved by matching mentors and coaches to the specific needs of entrepreneurs; and present a pre-screened group of candidates worthy of investor consideration.
Since 2010, PortTech has put on an annual EXPO showcasing maritime-oriented startups and emerging growth companies. The EXPO included a session featuring product or company pitches by entrepreneurs seeking exposure and feedback to their plans and progress. In 2012, we held the Pitch as the lead event the evening prior to the day-long EXPO to create a more focused event for a select audience of investors, service professionals and industry executives. In 2014, the PortTech Pitch evolved into a program focused on identifying and coaching investment ready startups by actively dedicating resources toward preparing participants for their fundraising efforts.
Pitch Events and Competitions
Quite a few pitch events offer the winning team money, in-kind prizes or even an investment by venture capitalists and angels. “It’s a great way for all participants to network in a productive atmosphere. It gives everyone the ability to ‘show their stuff,’” said Jim Winett, Partner of Level 11 LLC. But does that provide enough value for the amount of time and effort required?
We think that pitch events are useful, but often fall short of their potential. Events can be entertaining and provide exposure, networking and even money, but to truly provide value to founding teams they need to go beyond the “show.”
PortTech’s method takes the concept of a pitch event and turns it into a months-long program to provide maximum learning through coaching and practice. The event incorporates comprehensive outreach, education and coaching sessions that identifies the most promising emerging companies with clean technologies. The program involves recruiting, selecting and evaluating startups by staff; multiple coaching sessions with industry experts and relevant service providers; and intense preparation by founding teams. The finals are an opportunity for selected firms to demonstrate that they are capable, scalable and suitable for investment.
“A lot of events talk about innovation but PortTech walks the walk. Their pitch contest addresses real life issues and provides actual solutions for big important problems,” said Chris Wadden, Pasadena Angel and business consultant.
To create a pitch event that provides realistic context and goes beyond the “show,” we suggest incubators look to their core programs and incorporate those services in a highly concentrated way. This is how we developed the PortTech Pitch into an effective months-long coaching and mentoring program geared towards preparing startups for investment.
Participant recruitment starts in mid-spring and runs through early summer. Recruitment includes active participation and promotion at relevant conferences including other pitch competitions. We leverage relationships and affiliations with other organizers and sponsors who host events for technology startups (e.g. the Cleantech Open, Department of Energy’s FLoW and Green LAVA – the Cleantech Strategic Interest Group of the Los Angeles Venture Association). Messages and information about the program are broadcast through social media and submitted to technology calendars (i.e. socalTECH, LAEDC, Startup Digest and Sustainable Business). Flyers are sent to colleges and universities with departments and disciplines focused on energy, transportation and security. Information is forwarded to Small Business Development Corporation offices, local community and economic development agencies, NGOs, technology incubators and accelerators. And special announcements are targeted to local venture capital and angel groups investing in clean technology.
Clean technology companies with products or services that meet port industrial and maritime-related consumer needs contact the office during the recruitment period and the evaluation process begins almost immediately. Applicants receive informational materials on pitching, preparing presentation decks and general guidelines. Founding teams schedule briefings with staff to present their 60 to 90 second elevator pitch (without decks or demos) and respond to a brief Q&A.
Approximately 20 – 30 percent of applicants successfully pass this initial screening process. Preferred startups have clean technology based product(s) or service(s), an understanding of their primary market space, some validation (preferably sales), some traction (repeat sales, customer retention or expanding customer base), a mostly intact team, industry advisors, properly protected intellectual property and plans for growing the business.
The 20 - 30 semifinalists selected to continue in the program schedule coaching sessions that are conducted in person or via videoconference with a group of mentors and coaches selected to work with each startup’s strengths and weaknesses as revealed during the screening process. Southern California is among the leading regions in the U.S. for clean technology development and commercialization. PortTech is fortunate to have a large network of local industry experts, service providers, academics, investors and serial entrepreneurs who generously donate their time and expertise. Coaches focus on making sure that each applicant’s business model, strategies and resources are credible, reliable and dedicated. In particular, mentors intensely probe any assumptions that are made, but not yet validated.
Each applicant is thoroughly vetted during these coaching sessions. Business models, founding teams, value propositions, product/market solutions, branding, operational readiness and financial models are scrutinized. Launch strategies, sales cycles, customer acquisition costs, lifetime customer values are challenged. Experts review and critique pitch decks, presentation styles and narratives. Emphasis is placed on the market, team, opportunity and the likelihood of attracting investment. These sessions are challenging for both coaches and entrepreneurs as they tend to be unscripted, uncensored and intense.
Coaching sessions are the filter used by the staff to identify eight to ten companies for the Pitch finals. In preparation, a panel of judges is assembled representing the local ports (Los Angeles and Long Beach) environmental divisions, service professionals and investors who are active in the clean technology entrepreneurial community. Judges are given access to information and fact sheets, financials and other collateral about each of the final teams prior to the event.
The final Pitch event is conducted in front of 75 - 80 invited guests, sponsors, investors, port executives and stakeholders from the entrepreneurial community. Participants have eight minutes to present and then an equivalent time for Q&A from the judges. The presenters, preferably the CEO or Founding Executive, are allowed to use models, decks, demos, videos and other collateral materials that help explain and promote their business. Each entrepreneur must defend aspects of the presentation including models, markets and products during the Q&A. Judges rate entrepreneurs on their ability to articulate the opportunity, proposed solution, business model, product/market fit, IP/barriers to entry, team, status and milestones, use of funds and exit potential. From these evaluations, the startups are ranked and awardees identified.
Finalists are given exhibition space for the following day’s EXPO and have the chance to demonstrate their technologies, products and services to 600 attendees representing a broad cross section of port, transportation and maritime industry leaders; government and regulatory agencies; investors, business executives and service providers; and multinational corporations. Award winners are announced and introduced during the EXPO luncheon.
The Bottom Line
“The PortTech Pitch was tremendously valuable to our young company. All networking is not equal, and access to experienced entrepreneurs, investors, and business teams is not easy to come by,” said Dan Singleton, President and CEO of Transient Plasma Systems. “PortTech put our team in front of the right people at the right time and allowed us to leverage the event to meet critical investors and strategic partners to help grow our business. The insights gained from mentors while preparing for the pitch competition have made our presentations stronger and more exciting, and the presentation itself has made our company more recognized.”
We appreciate Dan’s comments and validation that our approach works. It takes a lot of effort from staff and volunteers to put on these events and our processes and methods help us meet our objectives with the pitch event. Our experience demonstrates that entrepreneurs are well served when they actively participate in events where the coaching and advice offered is specific and actionable. Coaches and mentors play a significant role in improving a startup’s chance at fundraising when coaching is tailored to address a startup’s deficiencies. Investors benefit from having access to teams that have been through a rigorous evaluation, focused mentoring and competitive selection process. And the greater entrepreneurial community sees the results of these efforts in new companies, fresh financings and job creation.
PortTech is a commercialization center and incubation program dedicated to creating sustainable technologies that enable ports and maritime-related businesses to meet their environmental, energy, safety/security and transportation goals. As a non-profit, PortTech identifies new clean technology applications for ports and prepares startups for success in maritime industries. PortTech employs a market centric approach that connects founding teams to potential customers, partners, service providers and investors.
For more information about PortTech, go to: www.PortTechLA.org
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