A little over three years ago, I asked myself this very question. Are business and pitch competitions a good thing to spend my time on? What I experienced might actually fly against your perceptions.

Here's a breakdown of five common methods of funding a startup and why competitions are very worth your time:

1. Self-funding or bootstrapping

You can self-fund or bootstrap your company. Heck, I've done that successfully several times in my business history.

From my first company until my most recent, I always bootstrapped the effort. It was not easy, but I was beholden only to myself. My thought was, no investors means fewer issues. This can be the case, but it also means no investor support.

2. Applying for grants

You can apply for grants. This method is usually extremely competitive with very low success rates.

Many grants are even harder to apply for and win than a business competition. I have taken the grant route and it is full of paperwork, qualifications and waiting.

The success rates are low by any measure, as you are generally competing against professional grant writers. This places your chances at a much lower probability if you don't have a grant writer on staff or under contract.

3. Applying for a loan at the bank

If you have a startup with little or no real assets, this is a long shot. I've used bank loans to grow companies, mostly in the form of credit lines. Once your company is established and generating revenues, this can be the cheapest way to grow your business, but it does require (in almost all cases) that you place your entire financial future as a bet.

If you fail, you are on the line, personally, for 100 percent of the borrowed funds. Sure, it sounds like a no-brainer--you're never going to fail. However, I can tell you that you will have sleepless nights when receivables are overdue.

4. "Factoring" receivables

Factoring is the selling of your company's receivables to a "factoring" company. The factoring company then waits for the payment according to your original terms. They commonly charge a discount fee plus interest. This can be very expensive.

Obviously you will need to have money owed to your company in order to factor. I have historically looked at factoring as a failing company's last lifeline.

However, in recent times I have noted companies using this expensive form of funding as a normal mode of operation. It works for some, but not for me.

5. Competing in business plan competitions

Competitions are fairly common these days, with some offering winners very large sums of cash prizes. A million dollars can be had in at least one regional economic development competition, while others have prizes that are also extremely nice--many in the six-figure range.

Let's talk about competitions

However, not all competitions come with "no strings attached." In fact, many of these high dollar prizes are designed to provide economic development to areas in search of the next Amazon.

In these regional competitions, winners are often required to relocate some, or even all, of their operations to the locality providing the winnings. Fair enough, since those were designed for local economic development.

As a previous winner and current semi-final judge of one of these regional competitions, I can assure you that the chance of winning is real. The recent stats I was able to review for 43North (the competition I am associated with) show that it's not a waste of time, purely statistically speaking.

The odds of a great startup getting noticed are very high. And, the odds of winning are determined by your direct competition--so your fate is in your hands for the most part.

Bottom line

If you're all-in on your company, you may employ some or all of the options I listed in moving your company forward.

Each route of funding mentioned has its merits and weaknesses. However, don't discount the business competition. There is more than money to gain when being selected as even a semi-finalist. However, as a winner, the intrinsic value is multiplied and can be much greater than the sum of the cash prize.

My experience is not unusual by any measure. I personally know many companies that have gone on to win multiple competitions, allowing their company to sustain growth while expanding their footprint, contacts and business knowledge in the effort.

So, if you have a company and are in need of funds, give the business competition a try. You might find out, as I did, that your time was well worth the effort.