Picking winners: Why so many new firms love awards
- 23 May 2013
- From the section Business
It seems like any crowded networking session - more than 100 people crammed into a small room in a Georgian townhouse in central London, free-flowing wine and beer and strangers introducing themselves amid a babble of conversation.
But this is actually a real-life version of TV show Dragon's Den (or Shark Tank as it is known in the US), and the four nervous finalists are waiting to find out which of them will be walking away with £3,000 of investment and - most importantly - the ability to say they are the 2013 winners of a competition called Pitch to Rich.
Trying to become a successful entrepreneur has never been more fashionable and thousands of new business competition schemes like this have sprung up around the world.
For while business start-ups of the past went to work to try to make lots of money, today they seemingly all want to also be award-winning.
And there are plenty of opportunities - Harvard University in the US has the New Venture Competition, South African Breweries has its KickStart scheme, and in the UK there is the Growing Business Awards. The list is almost endless.
But why are would-be entrepreneurs so keen to enter such competitions, and how do the organisers benefit?
'Make people listen'
Sir Richard Branson, perhaps the UK's best-known entrepreneur, didn't enter any competitions for start-up businesses as a young man - such award schemes barely existed back in the 1970s - but he now runs his own, Pitch to Rich.
Organised by Virgin Media Pioneers, the initiative was set up by telecommunications business Virgin Media to support would-be entrepreneurs. In addition to the £3,000 of investment, the annual winner also gets mentoring, as well as legal, branding and marketing advice.
The four 2013 finalists - whittled down from hundreds of entrants who each submitted a one-minute video pitch - are:
- a woman who wants support for her houses made from straw
- two brothers who have launched theft-resistant rucksacks
- a gourmet sweets start-up
- a man who has invented a new type of engine.
Each had four minutes in which to pitch to Sir Richard and four other judges - including Thea Green, founder and owner of beauty business Nails Inc.
After four impressive pitches, the winner is High Spirit, a business that makes theft-resistant leather rucksacks.
It is run by London-based brothers Joshua, 25, and 23-year-old John Okungbaiye. John is very clear on why they entered.
"The prize money and advice will be very useful, but you can't put a price on the publicity we should get," he says.
"Winning the competition will help publicise the brand, help convey the message, and make people listen."
A few days later, across in the City of London, another group of would-be entrepreneurs were pitching before a panel of potential investors in a real-world version of TV's The Apprentice.
This time it was young people, typically graduates, who had succeeded in gaining a place on a year-long intensive start-up support programme run by a charity called New Entrepreneurs Foundation (NEF).
Now in its second year, more than 600 applicants had initially applied online for one of the 26 places. Some 350 were then picked for phone interviews, before the final 26 were chosen following 250 face-to-face interviews.
The year-long NEF programme comprises four parts - a paid work placement with a successful entrepreneur for each finalist, regular business-skills workshops, monthly speaker and networking events, and one-to-one mentors.
The entrants then compete for investment by pitching their business ideas to potential backers, such as angel investor Ed Wray, co-founder of gambling website Betfair.
Amelia Boadle, 25, who is on this year's NEF programme, says: "It certainly was very competitive to get on, that was tough.
"During the year itself, it has still been competitive, but not cut-throat," adds Ms Boadle, who is pitching for backing for her helmet-mounted cycle light Cycle.in.sight.
Chris Sheldrick, 24, who is pitching to secure backing for his luxury sugar company, Sheldrick's of London, says he has benefited from the networking opportunities that NEF provides.
"I was always destined to run my own company, NEF has accelerated it, you can do in a year on the scheme what would otherwise take many [years]."
NEF's chairman, Oliver Pawle, says NEF's core aim is simply to create the entrepreneurs of the future to boost the UK's economy.
"We are unashamedly looking for the brightest and the best," he says.
But why do so many large companies and universities now run competition schemes for would-be entrepreneurs?
Brian Morgan, professor of entrepreneurship at Cardiff Metropolitan University, takes a rather cynical view.
"Corporates run such competitions because they can log it as part of their CSR [corporate and social responsibility] strategy, and it helps market them to the younger customer." he says.
"Universities largely do it because they are tasked with engaging with the local economy. At the same time, they can use the award scheme to advertise their courses to potential students."
With so many business start-up and entrepreneurship competitions now in existence, Prof Morgan says "there are beginning to be too many of them".
"You do have to worry that the sheer number of competitions and other schemes, and whether they devalue a young entrepreneur saying he or she won this or that," he says.
"But then at the same time, they are raising awareness of entrepreneurship, so at the end of the day the net impact is good."
Back at the Pitch to the Rich final in central London, how does Sir Richard think his young self would have fared in such a competition?
He says it reminds him of when, as a teenager, he met executives of a newspaper group to see if it would back his then student magazine.
"They were quite interested in getting involved in the magazine, and [then] I started talking about student hotels, student airlines, student this, student that," says Sir Richard.
"After a while they showed me to the door, they thought I was completely off my head.
"Anyway, I was talking ahead of myself in those days, so I suspect I would have lost by talking ahead of myself - which I often do and did."