When Dawson Barksdale heard about Tech Wildcatters and its model — come in, get your money and grow your business — he was excited.
But Barksdale, one of eleven startups who presented before investors at Pitch Day on Thursday at the House of Blues, was part of a new model, "The Gauntlet," a tiered system that makes startups earn their investment money by going through multiple levels.
"It's good for both parties," Barksdale said. "It weeds out the people who don't really know what they're doing, or want to do what they're doing, and it also lets the investors know who's real and who's not."
Barksdale's startup, Cyphr, helps local businesses with mobile marketing. Businesses that partner with Cyphr offer "secret deals" for only a 12-hour window on Cyphr's app. The customer can redeem the deal on their smartphone, and then walk into the business to and use that redemption.
Cyphr gets 10 cents from the business every time a customer views the deal. Barksdale expects his company to be driving revenue by June or July and he's already tested his app in Belton and Waco, with promising results.
Businesses used to get into Tech Wildcatters and then receive $25,000 right off the bat to grow their companies while giving up 8 percent equity. But now startups have a more rigorous system to receive money.
“We’ve really changed everything,” CEO Gabriella Draney Zielke told the Dallas Business Journal in February. “It’s totally from scratch.”
All the startups that presented Thursday were at Level 3, the Launch level, and each has the potential to go up to Level 5 to receive the most amount of investment possible. Barksdale likes the new model and the challenges it provides.
"Entrepreneurship and building a new business, it's not easy," Barksdale said. "If you back down from challenges, which some of the business have, you don't deserve at investment at that point."
After Pitch Day, Zielke sat down to talk about Tech Wildcatters new model:
What was broken about the old model?
I'm not sure I'd use the word broken, I'd just say there was a lot of opportunity for improvement. Not every entrepreneur is at the same place when they start the program, and not every startup gets to the same place at the end of the program. So they were kind of doing things in a messed up order.
We basically just wanted them to understand what things should be prioritized when. And then reward them for getting that accomplished and moving to the next level. And just being able to work with more teams in a deeper way. We get a lot deeper into their issues than we use to. These objectives really shine a spotlight.
Do you think this new model will change the kind of startups you attract?
It already has. You really have to be in it to win it if you go through our program. The old one, and current accelerators, if you can get past the first look and get into the program, here's all your money and resources. And you really haven't done anything but put on a show.
In our program, we're like, "Prove it." The ones who are attracted to our program are the ones that are competitive with themselves. It's great to be around that kind of energy as opposed to, "Well, I deserve it because you told me once that I was good." It's less of that entitlement and more of that, "Heck yeah, I'm going to prove it."
What has been the response within the program?
You're a little bit of parent when you say, "Look, I'm not trying to hurt you here, I'm not trying to make your life difficult, I'm just trying to say as a business, you have to make sure these things are done." I'm just trying to say, as a business, you have to make sure things are done. We kind of hold you back until we know you have the right stuff done. We haven't really had too much pushback and if someone just really didn't want to do the work, then we would part ways.
Evan Hoopfer is the Dallas Business Journal's digital reporter.