Many entrepreneurs think their business ideas are the greatest things since sliced bread. They think they have the vision, and their companies have the growth potential, to attract investors.
So make your pitches. And make them quick.
That's the challenge five local entrepreneurs face every other month when they come to Awesome Inc. on Main Street to play a real-life game called 5 Across.
The concept is simple: Five entrepreneurs are chosen from applicants to make a presentation before an audience, as well as three experienced business people who serve as judges. Contestants must make a pitch in five minutes or less, using no more than five PowerPoint slides.
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The winner of each 5 Across session in February, April, June, August and October receives $500 cash. Those five winners then compete in December for $2,500. But the learning is often more valuable than the prize money.
"It's just phenomenal to have opportunities like this in our own hometown," Anthony Schmidt, last year's 5 Across champion, told players, judges and about 50 spectators during this year's first competition on Feb. 23.
When Schmidt made his first pitch last year, he didn't grasp his business's potential. He had developed online management software for Alpha Phi Omega, a coed service fraternity he was president of at the University of Kentucky. "I was just playing on the Internet," he said.
His AOPonline software is now used by more than 50 chapters. His 5 Across experience helped prompt him also to start GreekTrack.com, which creates customized online systems for any campus organization to use for everything from social networking to recruiting.
The Lexington Venture Club and Awesome Inc., which provides workspace and other services to startups, created 5 Across to help connect entrepreneurs with each other and potential investors. They also wanted to raise the visibility of local entrepreneurship.
"It's a way of keeping in touch with the future of Lexington," Lou Allegra, a business consultant, said when asked why he serves as a judge. "I don't know that many people are aware of the vibrant entrepreneurial culture that's in Lexington now."
After each contestant makes his or her pitch, judges ask questions. Judges score the presentations on creativity, feasibility, profit potential and how far the entrepreneurs have taken their ideas. "What I look for is whether the entrepreneur has a view beyond a year or so," Allegra said.
Although judges pick the winner, audience members rate each business concept and presentation by texting a score, which shows up on a display screen.
While some potential investors come to watch 5 Across, the main purpose of the game is to give entrepreneurs practice, coaching and feedback, so they will do a better job when they make more detailed pitches in the future.
The first 5 Across session of 2011 included a diverse group of local entrepreneurs: A man whose company organizes social sports leagues for adults; three partners who design video games that can be played on a variety of devices; a man whose company uses online software to organize virtual golf tournaments; and a man and woman who have an online coupon service.
The fifth presenter and winner was Michael Hartman, a video game developer whose 15-year-old company, Frogdice, has published two games and will soon launch a third. He is looking for perhaps $1 million in capital to hire more developers to help his company grow faster.
"It was stressful, but the practice was valuable," Hartman said after his pitch. He will be making a more detailed presentation this month to the Lexington Venture Club.
Randall Stevens, a 5 Across judge whose Base 163 on Main Street rents space to startups, thinks the game is a good way for entrepreneurs to get advice.
"One thing Lexington has been missing is the mentoring aspect," he said. "So this is one way I try to practice what I preach."