Rethinking Startup Funding Contests

As we rethink startup planning to feature iterative growth, we need to concurrently rethinking the way we fund small startups. This applies whether we're talking about capital intensive or bootstrapped models. Business plan competitions generate a large number of losers in a community for every one or few winners. You don't build a thriving economic ecosystem of entrepreneurs by creating new generations of losers. The new model replaces the old model that brought together competing startups and to divide them into two classes of business plan contest winners and losers. In the new model, funding development is ongoing, not periodic with each new funding contest.

Then, everyone in a qualified group of startups would receive incremental funding, like $1-5k for each milestone reached. Funders and investors would outline key milestones. These would include things like: first Agile Canavs completed; first round of crowdsourced and 3F's (friends, families & fools) funding achieved; first round of early adoptor paying customers achieved, and so on. Given that many startups succeed with less than $10k this is a viable and sustainable model based on agile planning principles which are highly more valid than old business plan models.

This would energize a community of startups and a sustainable ecosystem of support to foster their growth and success.