If your early-stage technology company is already successful but you see even greater potential though expansion into the United States market, then the CI VentureClash competition could be your way in. Since Connecticut Innovations began its annual global venture challenge in 2016, 12 companies from eight countries have won investment awards ranging from $500,000 to $1.5 million.
2017 VentureClash Winners
First-place: $1.5 million
FRISS, Netherlands—State-of-the-art insurance fraud detection solutions
Second-place: $1 million each
SCADAfence, Israel—Mission-critical cybersecurity threat protection
Vouchr, Canada—Innovative online gifting tool
Third-place: $500,000 each
Davra Networks, Ireland—Complete Internet of Things platform
EAVE, United Kingdom—Next-generation hearing protection and communications technology
Through the competition, CI is seeking to attract from around the world the most promising young companies in the fields of Digital Health, FinTech, InsurTech and IoT. Within those industries, each winner must be able to demonstrate significant home-country market validation and the ability to bring a scalable solution, highly efficient business model, strong go-to-market strategy and expert management team to Connecticut. CI CEO Mike McCooe would tell you, “First and foremost, you have to be ready, willing and able to disrupt in the United States—in a big way.”
The challenge is significant but the rewards are great, as the 2017 winners have said. We asked them to share their thoughts about the competition, why they believe they won, and what advice they would offer to next year’s contestants.
What were the primary factors that, you believe, made your pitch successful?
FRISS: I believe our great product and company were significant factors, as well as the fact that we have a well-established, growing firm that has already enjoyed significant traction in Europe and an expanding international footprint. The leadership of our senior team was also key, as was the predominance of our industry, the insurance industry, in Connecticut.
SCADAfence: I think much of our success was a result of having a finely tuned presentation. You have to have a very sharp message and a storyline that flows. Seven minutes is a long time to fill, so you have to keep listeners engaged with a continuous story that delivers a captivating message about why your company is great and why it will be even better after expanding into Connecticut. In our case, we already had market traction and were generating revenue with a growing customer base. What made our pitch all the more compelling was our ability to present concrete examples through case studies of how we are meeting a demand and solving a problem for current customers.
Vouchr: I think the judges responded favorably to the simplicity of our value proposition. We demonstrated that we have created a unique product that customers value and are willing to pay for. There was no need to be too complex in our presentation—we just talked about the huge opportunity that exists for our company. We really wanted to get them excited about our vision versus the nitty gritty financial details. Of course, we were well prepared to answer any financial questions.
Davra Networks: CI wanted strong companies that will bring value to Connecticut, and we were able to exhibit those characteristics. The fact that we have a solid core business that is advanced and growing rapidly was a decisive factor. Another key to our winning was our genuine belief that Connecticut is an ideal location—a transportation hub with access to dense populations surrounding Philadelphia, Boston, New York and Washington. Transportation, particularly an extensive rail system, is a big part of our business, so the Northeast was the place to be.
EAVE: In our case, we delivered a persuasive, gap-filling business proposition. We are fortunate to be able to offer a solution in next-generation hearing protection that is truly needed by a great many companies. It was a no-brainer in the United Kingdom. Both customers and investors were very interested. In our presentation, we were able to show the strength of our growing existing market in the United Kingdom and the tremendous opportunity for similar success in the United States.
How challenging was it to face the panel of judges? How did you prepare for it?
FRISS: The judges were great. I was well prepared for their questions because I have a very clear vision of my business—where we are now and where I want to go with it. Some asked about our financials and projections, which I was able to discuss without much difficulty. If you’re fully prepared, handling five minutes of questions should not be too challenging.
SCADAfence: The judges were from diverse backgrounds without a great depth of specific knowledge in my industry. So, it was important be sharp and able to answer questions in a less technical way. Quick thinking is key and concise responses are crucial—a response that you’d need five minutes to explain fully, you have to explain in less than a minute. To prepare, I worked with the CI mentors to assimilate what to present to the panel and how to respond to a range of questions that might be asked.
Vouchr: I had no idea what the questions would be. At first, some of the judges seemed somewhat skeptical of our vision and of the vast opportunity we foresee. I think our best approach was to keep returning to the key points from our pitch—steering the focus back to the value proposition we emphasized in our presentation. I wanted to leave the judges knowing that there is a massive market for our product, how we are differentiated from our competition, and why we’re winning and will continue to win.
Davra Networks: Every engagement with CI throughout the VentureClash process, including participating in conference calls, responding to due diligence questions, and practicing our presentation, guided us on the path leading up to the panel. Although we had no specific guidance on the questions that would be asked, we were prepared for a broad array of questions about our business model, structure and growth plan. It was stressful to answer questions in that setting in front of 300 people, but it was also exhilarating.
EAVE: There were no major surprises that we were not prepared for. We have been fine tuning our pitch for a couple of years, facing many teams along the way, so we were ready for a wide range of questions. To sharpen our skills, we tested our presentation on a lot of investors and customers to hear their reactions and address their feedback.
How helpful were the CI mentors throughout the process? In what ways did they help? Did your pitch evolve or change as a result of their input?
FRISS: The mentors were extremely helpful with my pitch. The time they spent with me was very valuable. Richard Guha in particular knows the insurance business very well, especially in the context of gaining entry to the North American and U.S. markets and was able to make introductions to his industry contacts. Kevin Carroll gave me extensive feedback on my pitch in terms of the angle and recommended that I incorporate stories to illustrate key points. My pitch definitely evolved and improved as a result of Richard’s and Kevin’s time and input. It wasn’t so much a matter of changes to the way I presented the company or the value proposition, it was more about how to bring the pitch forward in a better and more American way with bolder statements and with the mindset of the audience in mind.
SCADAfence: The main activity the mentors helped with was refining the pitch to fit the crowd, the atmosphere and the opportunity. After working with the mentors, my message and delivery improved significantly.
Vouchr: I was frankly surprised by how much value the mentors provided. These are very smart, savvy people who really helped us refine our deck and pitch. They also gave us some great general business advice and suggestions for our business model. We hope to keep working with them as we choose a location in Connecticut. And we plan to make good use of the many contacts they shared with us—including banks, investors, networks and others—to bolster our sales effort.
Davra Networks: As we engaged with CI, we saw the tremendous value of the support structure the mentors provide. As a result of working with the mentors, especially Doug Roth and Richard Guha, my pitch evolved 100 percent. The most important advice they gave was to move away from our standard pitch to focus on the value we will bring to Connecticut. I truly believe that even if we blew the judges away with a great pitch, we would have lost without the emphasis on Connecticut and our ability to create hundreds or even thousands of jobs here. The mentors also provided crucial introductions to their partners and contacts in the fields of law, finance, human resources and real estate.
EAVE: Our pitch did not necessarily evolve from working with the mentors—we had spent 18 months refining our user-centered approach within the European market. Where the mentors were very helpful was in translating that value proposition to the U.S. market. They helped fill our gap in knowledge of the American business mindset to make our presentation more persuasive. Their contacts also really helped us establish connections to prospective customers. In fact, in the time leading up to the finals we had already made some proposals to Connecticut companies.
What advice would you offer an early-stage company considering entering the VentureClash competition next year?
FRISS: For any non-U.S. company considering expansion into the American market, I would recommend enrolling in VentureClash. The program provides a great process for learning about doing business in the United States, and it’s a perfect opportunity to create your proof points supporting your chances for success by expanding your market globally. If you can afford the time and expense, you should go to Connecticut for the weeklong Camp Venture. Without that participation, it’s hard to grasp the whole concept, and you may feel disconnected from the process. Also, take advantage of the opportunities for one-on-one interactions with the CI mentors and be open to their feedback. And be receptive to the many chances to make contacts and network throughout the competition. In short, get everything you can out of the experience. Being part of the finals round presented more opportunities than I expected in terms of meeting interesting people and connecting with advisers and industry leaders. In my case, I was able to meet the Connecticut Insurance Commissioner—a crucial contact for my business in particular. Lastly, I would say that you should just be very prepared and remember that it’s not like an ordinary VC pitch—you’re pitching CI as an investment partner, which is a different mindset.
SCADAfence: If you’re considering entering the competition, you should think from an early starting point about the value of Connecticut for your business. One of the main things you should focus on is why you need to be in Connecticut and also what you need the money for. I can’t overemphasize the importance of making sure you can explain “Why Connecticut?” for your business. If your explanation is weak, it will not be compelling enough to incentivize CI to make an investment in you.
Vouchr: The program is very valuable as a means to enter the U.S. market. But you should take some time to get to know more about CI first. You should make sure your product and business are a good fit for CI and vice versa. Ask yourself if it feels mutually beneficial. If you do participate in the competition, I strongly recommend taking advantage of all the opportunities CI offers throughout the program. And be open to suggestions from the mentors—it can only help improve your business strategy and pitch.
Davra Networks: As you enter the VentureClash program, you should be prepared for a long process—it’s about six months from the time you register to the day of the live competition in New Haven. It’s a huge effort pulling data together and other preparation before each stage of the competition. And when it comes to your pitch, be sure to focus on why your business is a good fit for CI—that is one of the most important points to make. It’s crucial to understand the mindset of whom you are pitching. You should also focus on your big wins, big partners and big market opportunity. Too much financial detail will kill the energy of your presentation. Throughout the competition, it’s also vital to take full advantage of the value offered by the CI mentors. Everyone at CI will provide very useful input in small and large ways. So, be open and listen to the feedback. You’ll be glad you did.
EAVE: I would suggest you make sure you have a strong enough early-stage business to justify expansion into the U.S. market. If your revenue and sales are not thriving and you don’t have a growing client base and a solid value proposition, then it’s probably too soon to look at this type of global expansion. But, if you’re ready, the United States is the most exciting and interesting domestic market to pursue. And CI is a great link to it. It provides a powerful network of connections and a gateway into a market where the opportunity is huge.
The mission of VentureClash is to speed Digital Health, FinTech, InsurTech and IoT innovations to market by awarding capital to the most promising early-stage companies from around the world. But, a cornerstone of the CI approach is the belief that it takes more than just an infusion of money for a rising young business to succeed. Therefore, the VentureClash process incorporates an extensive ecosystem with access to a critical network of customers, investors, mentors and talent. As the 2017 winners have attested, it is that comprehensive support structure that helps pave the path to victory.