Winning a $500k pitch competition

I locked myself in my hotel room, dressed in full suit and tie, and pulled out my laptop and presentation clicker.  Heart racing, I opened Powerpoint and scanned through the slides.  I had two hours to cut my investor pitch in half, from 10 minutes to five minutes, and present in front of the top business leaders in Michigan for a half a million dollars.  This, the fifth year of the Accelerate Michigan Innovation Competition, was going to be the first in which a medical company didn’t win.  This year it would be high school sports.  I scanned the slides, ruthlessly culling great work, the results of weeks of agonizing labor, to get down to the bare minimum. 

Most people, in a time crunch like this, tend to naturally want to speed up their talking to make sure they get in all the content that they want.  This is a mistake.  If you talk too fast for people to easily keep up, in other words anything quicker than a typical conversation or your normal pace, people fall behind and stop paying attention.  And once that’s happened, you’ve lost.  The key instead is cutting the content, as hard as it is, down to just the bare essence.  To do that you have to kill your babies. 

Go to market plan, competitive advantage, financials – three key faces on the mount rushmore of startup business pitches – gone, gone and gone.  Still too many slides.  Exit strategy?  Gone.  Everything deleted with a vengeance, until all that was left was the story.  The part of the pitch that most people overlook in an effort to check the boxes.  My relationship with my mom, our late nights in the driveway playing hoops, and an entire childhood playing basketball culminating in a single victory against Grandville High School in the district finals.  The crowd rushing the court as the final buzzer sounds, and my mom, 105 pounds soaking wet, jumping into my arms for a hug. 

The little boy running to the mailbox the next day and seeing a picture of himself hugging his mom plastered across the sports section of the newspaper.  Embarrassment in the locker room (it was the fourth or fifth Ryan Vaughn photo spread of the season), but a moment to cherish for my mom. A moment every investor in the audience can relate to.  That’s it.  That’s the win.

90 minutes left to pitch.

The transition.  These moments, the ones that connect us as families – me to my mom, but also you, Mr. Investor, to your kids – are no longer available to most kids.  And that’s what VNN does.  We capture these moments, so you can keep that close, parental relationship with your kids, forever.  They grow old, kids, and they leave the house.  We all know this intellectually, but we all expect that it won’t go as fast as it does.  If only we could hold onto them as kids for a while longer.  Through VNN, you can. 

The rest is checking boxes.  Software platform, monetize with advertising, scaled across Michigan, our home state.  Check, check and check.  Everything else goes.

Down from 10 slides to five, so I figured I was fairly close.  I clicked presentation mode and started the timer.  I faced the mirror.  “Hi, my name is Ryan Vaughn, CEO and Co-Founder of Varsity News Network, which is kind of like ESPN.com for high schools….”

First rep, 5:25.  Close enough, just economize the words and we’re there.  60 minutes left before pitch time.  Face the mirror: “Hi, my name is Ryan Vaughn, CEO and Co-Founder of Varsity News Network…”

Second rep, 5:10.  Probably there, but not taking a chance they won’t yank me from the stage.  And the ask felt weak; like every other ask.  “We’re raising money, and your money will help us hit milestones.”  Too generic.  The key was to create a puzzle that was almost done, and the investor was the missing piece.  The smallest, most insignificant piece to make the beautiful picture complete, if they only leaned in and said Yes.  But I had an idea.

Third rep, 5:15, but nailed the ask.  “We’re raising three million dollars to scale our proven platform and proven business model across the country, and have two and a half million committed from top venture capitalists across the state of Michigan.  On behalf of Accelerate Michigan, I hope you will consider using your vote to catalyze a new world for high school athletes and their families across America”.  Not over the top, but just up to that point.  Perfect. 

And nearly true, also, which was a bonus.  Our business model was proven, if you only looked at the proven parts. We had actually set out to raise $1.5 million dollars and, after overcommitting our round, chose to open it up to $2.5 million, and we were pretty much fully committed there too.  But I knew my investors — the top venture capitalists in Michigan from my perspective, if not necessarily objectively — wouldn’t mind me bringing in an extra half million dollars of mostly non-dilutive grant money, so we could have been simply raising $3 million dollars all along, in service of the story.  Plus throw them a vague compliment.  It checked out, close enough. 

30 minutes left to pitch time.  Two more reps at 5:10 and 5:05, and I closed my laptop.  I packed up, phone, hotel key, wallet, and headed down to the lobby, where a chartered bus was waiting to take the finalists to the Detroit Opera House. 

Earlier that day and all day the day before had been the prelims.  Hundreds of startup founders had packaged their innermost dreams for sale to the highest bidder, bringing their business arranged according to the pitch template they found on Techcrunch or somewhere, to one of the many conference rooms within the sprawling hotel complex in Pontiac.  We all presented our businesses in a strict 10-minutes to a judging panel made up of venture capitalists, volunteering their time for the competition.  That part of the competition had gone off, mostly, without a hitch. 

The minute I got my room designation I was confident, as two of the judges were investors who had already committed to participate in our financing round.  I needed to represent well, but they were at minimum positively inclined.  When my turn came around I engaged the audience in emotion, self-deprecating humor, and business polish.  I was hit with a wave of dread when the timer went off and I hadn’t finished my last slide, comparable exits throughout lateral markets, but one of those two investors came through for me, using her first question in the Q&A session to ask me for my thoughts on comparable exits.  I knew I did well, but also that in prepping for the prelims I had not given any thought to the five minute final round, or how I would tweak my already tight presentation to fit.  No matter, first things first.  And when I was announced as a finalist I knew I had to hustle.

It had been a whirlwind of a couple days, but skipping a session of mingling and swapping business cards was a foregone conclusion to get ready for the finals.  And they were here now.

We filed off the bus and into the Opera House. 

The auditorium was empty as the rest of the business community wouldn’t arrive for another half hour.  During sound check, I took the opportunity to drill the presentation a few more times, and size up the competition.

Historically, the AMIC had the reputation of always being won by a medical device or pharmaceutical startup.  Hard to argue with the concept that if the state of Michigan was going to give a significant grant to a startup, it should be one with the opportunity to change the world in some impactful way.  And sure enough, my competition included two medical device companies, one company with a cure for cancer, and another company which had built a new type of construction material capable of constructing buildings cheaper, taller and safer than ever before.  And the CEO of one of those companies was a mentor of mine, an older serial entrepreneur who had built and exited multiple startups, developing a track record which put my own to shame. 

But at times there is no substitute for ignorant optimism, which I had unabashedly. They ran through the presentations once per startup, set the order in which we would present, and then shuffled us backstage while the crowd filed in. 

In all my time doing pitch competitions, I don’t know that I could tell you details about the presentation of anyone else I’ve presented against, so hyper focused am I on rehearsing my pitch right up until the last moment.  But at some point I was up next, and my heart started beating through my chest.  It was all I could hear, echoing throughout my entire being while I tried to manage it with deep breathing.  And then there was clapping.  And then the emcee announced Varsity News Network, and I walked out on stage squinting from the spotlights.

Start with the story.  My mom, our relationship.  Joke about the impact of the picture of me hugging my mom had on me in the locker room got predictable knowing chuckle, so far so good.  The only thing I could see past the stage itself and the podium I stood behind was the monitor the producer had placed at the edge of the stage, which showed the slide I was on and the time remaining.  I transitioned to the business slightly behind pace, at around 1:20 in, which meant I had to trim thoughts throughout the rest of the presentation in order to finish on time.  We had been instructed that they would yank you if you went more than like 5 seconds over, so I needed to take that seriously.  So on the sales slide, cut the explanation about how lean startup methodology had produced a model, and instead simply say “we have validated that each rep will produce $10k per month in revenue, and will cost only half that”.  So much more juice on that slide, but saved 10 seconds.  Similar slight cuts throughout the remaining slides, until finally flying through the financials slide with simply a “take a look at our financials, you can see that based on current performance we’re on pace to hit $50m in revenue in five years, breaking even after only three with capital that has already been committed.” 

Pause to setup…

“Almost.”

To execute this plan, I explained, taking my time on this part, we need your vote.  We are so close, kids across the country are so close to having powerful connections with their parents, just like you could with your kids, but we just need your vote to get to work. 

I thanked the audience, strong applause followed me down the side of the stage as I took my seat amongst the founders on the right side of the second row. It wasn’t perfect, but I had a good feeling about my chances.  Even if I didn’t win the grand prize, I thought I definitely presented better than most of my competition, so hoped I’d at least win one of the category prizes.

We all adjourned to the lobby for 30 minutes while the judges deliberated on the variety of awards they would give out that night – $25,000 for each category (consumer, medical, food, etc), $25,000 for the audience’s choice, followed by $50k for third place overall, $100k for second, and the grand prize of $500k.  After checking to see if I’d pitted out my jacket (slight sweat stains under the armpits, just have to keep arms down and no problem), I made my way to the buffet to mingle and kill time.  People at events like these are a pretty good barometer of how you did; they’ll either fawn over how well you presented in a completely over the top way, or they’ll simply say something like “nice job”.  The former vastly outnumbered the latter that night, so I was feeling pretty good as we filed back in and the lights dimmed. 

I pretty much tuned out most of the awards, only noting that I didn’t win either of the two categories that were relevant to me: audience choice and Internet.  That was either bad for the obvious reason, or good because they probably wouldn’t give one of the big winners the award for their category as well, I reasoned.  It progressed to the top three awards, and as I considered I realized that both the construction materials company, a pharmaceutical company curing cancer and a medical device had not received an award either.  These were the companies I was the most nervous about, but I was still confident. I pulled out my phone to nonchalantly take a video of the awards for posterity, just in case.

Third place was the materials company.  I stopped filming after they were announced, and he went up and took his check and went backstage.  My heart was pounding again as the announcer came back up with another supersize, Happy Gilmore check. 

Cancer company, lead by my mentor.  Holy shit, I thought, I might win this thing.  Either that or I completely flamed out. They were the ones I expected to take it home just given his track record.  If not them, I think I actually could win this.  Maybe it’s the medical device company, or maybe someone else.  Can’t think of who, but could I really win this?  I trained my phone’s camera on the proceedings as the announcer took the stage for the final time.

“This is a big one,” the announcer quipped.  “For the grand prize this evening, on behalf of the Accelerate Michigan Innovation Competition… this is a game changer, this is a life changer.  Ryan congratu…”. The crowd erupted and my whole body flushed with adrenaline.  It was so loud as I got up from my seat and approached the stage, the announcer smiling like a Cheshire cat and holding his oversized check.

I stayed for a few pictures and interviews after the fact, basking in my moment.  And I remember thinking that I wish I had someone there to celebrate the moment with.  This, my moment, was amazing, but I was the only one there (nevermind the anonymous business community).  I hadn’t invited anyone from my team, ostensibly in an effort to give them more time to work but really probably because I didn’t think I had a shot and didn’t want to lose in front of them, and Laura was on her own work trip so hadn’t been able to make it.  It was a moment, but I wished it was shared. 

Leaving the Opera House, I went back to the hotel and up to my room to call Laura.  She answered the phone with a, “did you win?”

“Yep,” I said.  She cheered, and I listened to her explain the situation to her coworker on the other end of the phone.  I told her the play by play of the end and sent her the video I had taken of them announcing me as the winner, and after cheering once more she explained she had to go back to her dinner.  I told her to call me afterward, and then called my VP of Sales.

I shared the good news and he congratulated me, although it didn’t seem like he really understood the gravity of what we had just done.  The odds against it, as medical companies had always won this award.  He said all the right things, but he hadn’t been there so there was only so much he could relate.  I walked him through the implications of the cash, how it would unlock so much for our business and finally close the financing round, but as always set expectations about how the deal wasn’t done until we had money in the bank, so it was critical that we maintained our strong execution at least until we could close this round.  He agreed.  I went downstairs for a dinner in the lobby, and decided that the company could spring for a steak dinner that night.


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