What Judges Look For At Business Plan Competitions

What do the judges think?

That’s pretty much on the minds of anyone who has been part of a business plan competition. So I asked John Reale, who for the past seven or so years, has been a juror for the Rice Business Plan Competition, (RBPC) scheduled for April 14-16 in Houston, Texas.

Among many, many other things, John is co-founder and managing director of Station Houston, which he describes as “Houston’s center of gravity of for software-enabled startups.” JR, as he is called, is also the President-Elect of TiE Houston, a non-profit organization that mentors entrepreneurs.

Here are his observations from the front lines – and advice for business plan competition competitors. Edited excerpts:

Why Teams Are More Polished and Better Prepared These Days

“They’re getting more support; there’s more information available on the internet from previous competitions.  With networks like LinkedIn , it is easier to access RBPC alumni as well as judges and sponsors to gain advice and feedback. For example, in recent years, winners of other business plan competitions have arrived three days ahead of the RBPC in Houston where they receive mentoring from members of TiE Houston. The teams receive mentoring, not only to improve their pitches, but also to think through various parts of their business. All this, I believe,  has led to more activity and interest from investors in the competitions.”

Big Mistakes Teams Make During Pitches.

“I think some teams, especially teams that license a certain technology, feel like their technology alone rules the day…that the best technology wins. This usually isn’t the case. I prefer when the teams clearly communicate their understanding of root causes of the problems their technologies are supposed to solve. That gives me more confidence that they will figure out a viable solution. Bottom line, if you spend your entire pitch reviewing why your technology is the holy grail - without being balanced by your time spent with customers - that usually tells me something.”

How to Use the VC Community Early On

“Get feedback from the venture community to understand what their requirements are for, say, a Series A round. If you  connect with a VC early -  and say you just want to understand what they seek to source an investment at a later stage - they’ll usually provide a framework about the progress they require.  For example, how you have built your management team and how you have  created traction with customers. This knowledge is gold for a company pitching seed stage money.  It can  bring clarity to a startup's roadmap and funding needs. That helps when you are asking us, as investors, to support your venture. Is there a bridge to somewhere - and why is your company so valuable? So many times, we’ll hear a company say they are seeking X dollars when they have not provided some validation of their plan.”

Characteristics of Top Competitors

“I think the best teams, in general, spend the most time describing the problem they’re going to solve with great detail.  They usually have lived these problems, demonstrate credibility in understanding them, and are clearly passionate about why solving these problems matter. Last year, Langston Suen and his team from Sonikure Technology from Hong Kong spoke about the challenges in treating retinal disease in great detail. They spoke about the state of the art, which involves sticking needles in people’s eyes. They spoke about how 50% of the patients refuse this treatment….how the state of the art results in so many infections. And they spoke about the impacts to customers and dollars, as well as the practices today involved with the hospitals that provide this care. That told me that they really got it and the opportunity in front of them.”

Team Building

“Another characteristic of impressive teams is getting that they have to build a strong foundation. One of the most important things they can focus on? Developing a world-class team to help them shape the business. Be humble and accept that the company will benefit from experienced leadership where there are clear gaps. Not all teams, or startups, fully grasp that. It’s one thing to understand what the business is, and it’s another thing to show that they have members on the team who can execute the plan. And if you don’t have this person on the team yet, tell us, the judges, how you have brought on advisors to help, or that you are seeking help with these items beyond capital from your seed investors.”

The Winners Aren’t the Only Winners

“I think getting in the arena has so many benefits. The RBPC and other events can be company-changing boot camps for startups. Some companies, of course, might not win the competition, or make the finals, or even the semi-finals. But the smart competitors consider the feedback, build relationships, and use the lessons they’ve learned to improve themselves and their startups. That’s what really matters.”