Last week, we discussed three ways to obtain financing for your startup: venture capital, bootstrapping, and bank loans. While these are the most traditional ways of putting money in your startup's bank account, there are other methods, including pitch competitions.

Entering your startup in a pitch competition is about more than just money. Early-stage founders can also sharpen their messaging, gain a better understanding of their startup's strengths and weaknesses, and gain exposure to potential investors--regardless of whether the startup wins the competition.

Here are a few things you need to do to prepare your startup for a pitch competition:

Look for competitions in atypical locations.

Communities across Middle America have made pitch competitions an important part of their approach to entrepreneurship and economic development. Cities like St. Louis and Erie, Pennsylvania, have startup competitions, accelerators, and incubators that offer anywhere from $2,000 to $50,000 to winning startups.

"Submitting our startup for consideration in multiple pitch competitions, demo days, and incubators was a way for us to generate early revenue and further clarify and hone our ideas," said Georgi Christov, founder and CEO at Mimirium. "We are 100 percent better for having applied, even if we didn't receive funding."

Christov's startup allows users to collect, store, and monetize their own data. The company received $50,000 from the Secure Erie Accelerator, $25,000 from Singapore's Cylon, and was named the best blockchain startup at the Dubai-based GITEX 2018 conference.

Pitch competitions in nontraditional locations can give entrepreneurs a chance to become a big fish--no matter the size of the pond. 

Realistically assess whether your startup is at the right stage to participate in a competition.

Is your startup still a rough sketch on the back of a Coors-stained Applebee's napkin? Or are you already earning real revenue from customers? There are pitch competitions suited for startups at every stage. Research past winners to determine your startup's appropriateness for specific competitions.

Founders need to value their time and not seek out any and every competition in a desperate search for early-stage capital. Time wasted on a pitch competition that was never going to happen is time that could have been focused on realistic paths to funding.

Pay attention to the rules.

Full disclosure: My wife ran a startup competition for years. Every fall, applications would come pouring in--and based on her observation, there was a direct relationship between the size of the founder's ego and the thoroughness and accuracy of their application.

Some entrepreneurs thought they were too good to follow the rules, and it showed.

Those applications were thrown away.

Most startup competitions run on a shoestring budget. Organizers simply don't have the time to weed through incomplete applications to determine if a startup is a good bet despite what it doesn't say in the application.

That said, there is a bigger reason why incomplete applications (including applications where founders skimp on questions that deserve long, thoughtful answers) should be thrown in the trash.

Entrepreneurship is humbling, and if you're too good to pour your heart and soul into answering an essay question, you are also likely too good to do whatever it takes to turn your startup into a real business.

In other words, you were too good for success--but perfectly suited for rejection.

And learning even that can be worth entering your startup in a competition.

Published on: Sep 25, 2019
The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.