My First Hardware Startup: Rimo (4)

Pitch competition

[ This series of articles is about my startup company, Rimo, from the conception of the idea, recruiting a team, producing prototypes, to fundraising. ]

I also tried to find angel investors by participating in some pitch competitions. These events usually invite some angel investors as judges, and we, the startup founders seeking funding, take turns presenting on stage, trying to impress the wealthy people in the audience. Not all the judges are angel investors though; some are more like sponsors who participate to promote their own stuff. Whether it’s the presenters or the judges, everyone participating in the event has a strong purpose, all wanting to gain something from it. In the first event I participated in, I won second place in the pitch competition. For a few minutes after winning, I thought I would have smooth sailing and a flood of money coming in. However, the prize turned out to be a discount voucher from a sponsor, offering a 50% discount on their startup consulting platform. During the award ceremony, the sponsor’s boss gave a long introduction about their company, and it was only then that I realized I had participated in someone else’s promotional event. Another time, during an online presentation, I received high praise from an angel investor who thought Rimo had potential and invited me to discuss further after the event. For a few minutes after being complimented, I thought I would have smooth sailing and a flood of money coming in. However, it turned out that the investor wasn’t very interested in Rimo; they just wanted me to tell a female co-founder on my team that if she was still in school, she could apply for a fund for female student entrepreneurs that they had founded.

Of course, there was also meaningful feedback and opinions. After several pitch events, I found that many investors’ feedback was, “If Rimo sells well, what’s the next step?” Investors want to see ideas that can scale, where they can throw money at it to quickly grow revenue. Whether it makes money or not doesn’t matter, but it needs to grow quickly so that they can exit quickly in the future, such as through an acquisition or IPO, to realize their investment return. They are looking for the next unicorn. They found it hard to see Rimo as a company that could sustain growth and didn’t think Rimo would give them a significant return on investment. They felt Rimo was more like a one-time product and suggested we were more suited to crowdfunding sites like Kickstarter or Indiegogo.

Besides angel investors, there are other companies that can help share the initial mold costs for factories, but the condition is that a portion of the profits from the sold products must be returned to the company. It’s a bit like a book publisher that helps with printing and marketing, but takes a portion from your royalties. One year, after exhibiting at CES, I received a call from such a company. The agent from the company was looking for innovative products. His secretary had given him information about Rimo and other companies exhibiting at CES, and he picked a few he found interesting and wanted to call to learn more. He asked many questions, and the conversation was quite pleasant, but after hanging up, there was no follow-up. Although it’s hard to know the reason for the rejection, one question, in hindsight, was indeed poorly answered. After hearing about Rimo’s concept, he tentatively asked, “Wow, such an amazing product. It must be hard to make, right?” I proudly replied, “It’s not hard to make! It sounds complicated, but once you know the concept, it’s actually easy to realize.” When investing in a company, they definitely look at the technical barriers and whether competitors can easily copy it. With such a shallow technical moat, even if it is a good product, there is a high risk it would be copied quickly, and the manufacturing costs wouldn’t be recovered. Therefore, when answering questions, always think about the reasons and purposes behind the questions, and think from the investor’s perspective: what kind of company do I want to invest in?

CES Pitch competition