The Carolina Challenge Pitch Party is a three-ring circus of startup. And as much as I decry the public pitch as the exploitation of the entrepreneur to sell tickets to an event (or sponsorships or ads or nachos), the Carolina Challenge has found a way to walk the fine line between bringing in the crowd and actually putting that crowd to work to make the startups better than they were before.

Thursday night marked my third year as a judge for UNC’s Carolina Challenge Pitch Party. As usual, it was held at Top of the Hill at Chapel Hill, and this year 48 startups competed over the course of three hours for a $1,000 cash prize.

The only requirement for the Challenge is that the teams must have at least one member of UNC student, faculty, or staff. Beyond that, it’s pretty much anything goes, provided the company has an actual idea and a plan to turn it into something more than a class project.

There are two ways to do a public pitch correctly and they share one common ingredient between them, which also actually serves to contradict the public nature of the pitch. If you’re going to have a bunch of startups — be they early, seed or even later – pitch to an audience, that audience should be selective and the pitch should be targeted.

New SEC rules make it impossible (and illegal) to ask for investment on a stage in a public arena. This year’s Startup Factory Pitch Day evolved into the Startup Factory Showcase for this very reason, with a private investor-only lunch following the ask-free public portion of the event.

So toss the public pitch altogether, right?

No. A public pitch as an acceleration class graduation day still has its benefits. If the accelerator is worth its salt, so to speak (and the Startup Factory is quite salt-worthy), there should be plenty of anticipation from both a potential customer and potential press angle for the fledgling startups to gain tactical advantage by introducing themselves to the world from a stage.

You don’t have to come out of graduation day with a wad of cash anymore (although it helps). The money could come days, weeks, even months after your debut.

A Smart Crowd

The Carolina Challenge Pitch Party also puts their entrepreneurs in front of a selected group, although this one is a little more diverse. There are entrepreneurs (a few), faculty (obviously), accelerator and incubator directors (Dave Neal, John Austin, Dina Mills), angel investors (in an advisory capacity), and a few other random smart people.

And that’s the thing – there are smart people in the room talking to the entrepreneurs. This is mandatory, because this event is about making entrepreneurs out of people who have put their hand up and said they want to be one. It’s not about taking the temperature of the next wave of seed stagers or waving around the promise of potential fame and wealth to anybody with a hoodie and a dream.

These are, for the most part, students, and the Challenge is, for the most part, a program that purports to TEACH entrepreneurism. That, my friends, is a difficult task with an unproven roadmap, but also very necessary in a world where hoodies and dreams seem to be the only mitigating qualifications for startups.

Purposeful Networking

The Pitch Party starts with purposeful networking, where the entrepreneurs are aggressively encouraged to find judges throughout the reception hall and sell their companies. This is brilliant, because it forces a few things.

1) It makes the students initiate a conversation about their startup several times in a short period with judges who may or may not be there just for the free beer.
2) It makes the judges who are there just for the free beer take an active role in the event. Believe me, if you’re standing next to me and you ask a student entrepreneur a stupid Startup 101 question, I’ll call you out on it.
3) It makes people like me veer away from stupid Startup 101 questions and respond to their courage with something they could possibly use.

One of my entrepreneurial friends told me I was throwing fastballs at kids, but isn’t that the point of a public pitch? Don’t you want to know how to answer the first, second, and last question the actual investor/customer/accelerator director is going to ask you?

“Well, how is this going to make money?”

“What separates you from your competition?”

Come on. If you don’t have an answer for those questions then you don’t have an idea yet, you probably just have idealism. But when those questions are:

“Why are you trying to sell to the general public when you won’t get any repeat customers? What about selling directly to government?”

“Dude. If you don’t get critical mass, like, yesterday, all XXXXXX has to do is add this feature to their platform and they’ll bury you.”

During the next hour, the startups did one minute on one of three simultaneous stages, which is where the circus part comes in. You have to impress visually, shout to be heard, and even then you’re only getting 1/3 of the crowd – maybe ½ if you got to enough judges during the networking and sold to them like your job was on the line.

Learning on the Fly

I actually heard startups use some of the feedback that they were given during their pitches. Which means they changed their pitches on the fly. Which means they ARE learning.

From those pitches, three companies are chosen based on play money the judges use to vote. Two of my three made it to the final round, which consists of a longer, three-minute pitch to the entire crowd.

The winner was Let’s Chip In, a crowd-sourced gift-giving platform that had come to life just a week prior at Triangle Startup Weekend Chapel Hill. And while that’s awesome, it really isn’t about the win, or the competition, it’s about the experience. Jeff Henriod, the founder, has almost as many questions as he does answers. He’s learning as he goes, but he also has revenue.

Again, they ARE learning.

The point is, coming away from this public pitch party, 48 founders from 48 startups had the opportunity to take away learnings and come out better than they were before.

That’s a public pitch worth the pitching.

Editor’s note: Joe Procopio is a serial entrepreneur, writer, and speaker. He is VP of Product at Automated Insights and the founder of startup network and news resource ExitEvent. Follow him at @jproco or read him at