Many of these competitions are based on a Dragon's Den format, whereby entrepreneurs are given the chance to pitch their business ideas in front of a panel of judges, who then whittle down contestants, provide the promising with training and mentorship, and then let them fight it out.
One such competition is the Q-Prize, run by Qualcomm Ventures - the venture capital investment arm of chip maker Qualcomm. All of Qualcomm's investments are in companies that are 'mobile-only' or 'mobile-first', reflecting the company's own focus on mobile technologies.
The Q-Prize is Qualcomm's effort to get involved at the earliest stages of a company's growth and inception with a modest initial investment. Qualcomm runs eight regional competitions throughout the world - in Brazil, China, India, Israel, North America, South Korea, Western and Eastern Europe.
Each regional winner gets $100,000 (‚¬100,000 in Europe), and earns the opportunity to participate in a Grand Finals competition, which offers an additional $150,000 in prize funding. But according to Jason Ball, director Qualcomm Ventures, this is just the tip of the iceberg.
“The company's probably going to get a multi-million dollar cheque from Qualcomm as they grow up and they raise their Series A round,” said Ball. “It's a starting point for a relationship that may end up being worth millions of dollars during the lifetime of that company.”
The benefits for start-ups that win these competitions are not just financial, however. Ball said that Q-Prize winners also get access to Qualcomm's technology, roadmaps and plans, as well as the opportunity to exploit the spotlight.
“We spend a lot of money at CTIA and Mobile World Congress, and we try and leverage those events for the companies that we're working with,” he said. “That way we'll have a story to tell the marketplace, and it's great visibility for the companies we've invested into.”
One company that has benefited enormously from its involvement in Q-Prize is enterprise mobile company Enterproid, whose dual-persona technology is now helping to enable the Bring Your Own Device (BYOD) revolution.
Enterproid won the North American regional Q-Prize in 2010, and then went on to win the Grand Finals the following year. However, Enterproid's relationship with Qualcomm Ventures didn't end there.
“We have continued our relationship in that, not only did we raise a Series A round, but Qualcomm participated within it,” said Alexander Trewby, Chief Customer Officer and Co-founder of Enterproid. “If it weren't for the Q-Prize, Enterproid would not exist. We were very fortunate and it absolutely put us on the map.”
Enterproid raised a total of $11 million in its Series A funding round. Trewby attributes part of this success to the connections the company's founders made through Qualcomm Ventures.
“Qualcomm does business with all the mobile network operators and equipment manufacturers, so any time that we were seeking an introduction, that introduction would be made at the highest level of the firm, through Qualcomm,” said Trewby.
Furthermore, Qualcomm's global footprint proved to be particularly advantageous for Enterproid, whose three founders each live on a different continent - one in New York, one in London and one in Hong Kong.
“There are very few early-stage start-ups in Hong Kong, so there are cultural issues about stock options and their understanding of that,” said Trewby.
“Qualcomm as a VC has a portfolio of companies in China, and therefore have an understanding of the market. They have precedents and they have broached stock offers with employees before, and can provide us with advice and council in that respect.”
Trewby said that entering a competition like Q-Prize - or indeed Microsoft's BizSpark programme, Cisco's BIG Awards or Amazon's Start-Up Challenge - is very different from approaching a VC, doing a pitch and either getting accepted or rejected. "This is the beginning of a relationship that will prove useful no matter what," he said.
Ball added that, even for start-ups that don't win, there are advantages to taking part in such competitions. The panel of judges often includes business development heads from various companies, any of whom may take a personal interest in one of the semi-finalists.
Once again, it is about gaining exposure, and learning that building a successful technology company is not just about cool features, cool technology and cool design, but also about price and business model.
Competitions are by no means the only way for start-ups to get investment, but the benefits that come along with winning make them an attractive option. In light of the apparent shortage of tech-savvy investors in the UK, start-ups could do a lot worse than apply for something like the Q-Prize.
The third annual Q-Prize is now open for applications. More details can be found here.
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