When 43North closed the application cycle for this year's pitch competition, the nonprofit accelerator and incubator had 951 submissions.
For some, this may seem like the beginning of the organization’s journey to its Oct. 12 pitch contest finals, where five startups will each get a $1 million investment and move their headquarters to Buffalo for a year.
But for Colleen Heidinger, 43North president, and her team, applications' closing is just part of a busy recruitment season of hard work, aiming to get the highest-quality submissions.
“At end of day, we need up to 20 companies that we invite to Buffalo that could be worth of receiving our investment,” she said. “That big top number isn’t what it’s about. It’s about the identification of how we find quality and then how we exhaust ourselves to go get it.”
How does the recruitment process work?
43North's recruitment process starts at the beginning of the year, as the previous year’s cohort is moving to Buffalo. The team begins planning the annual competition itself, as well as planning how it's going to find startups to apply.
Applications typically open in May and remain open for five or six weeks.
43North’s approach is two-fold. For starters, the organization works to maintain relationships – from previous contest judges to those who have referred applicants in the past – that it already has.
Then the team targets sources it doesn’t already know, like new investors, accelerators or qualified friends of friends.
“Who should we meet with to expand that reach?” Heidinger said. “And that goes in any city we go to.”
From recruitment to judging, over the years, 43North has put more of an emphasis on involving venture capitalists and active investors in the process. The organization has over 300 investors in its co-investor network and about 1,000 investors signed up for its monthly investor newsletter.
That’s because investors typically give the group high-quality referrals and tend to understand 43North’s purpose and the impact it's trying to have in Buffalo.
“Those referrals are meaningful to us because those investors understand we’re building something bigger here than a venture fund," Heidinger said.
Also, the organization’s portfolio companies typically need to raise further dollars, so being in touch with a bigger pool of prospective investors is key, not to mention 43North could put out asks for mentors or entrepreneurs with certain skillsets to help its startups.
The nonprofit currently has a new investor relations manager position to fill, which it expects to do before this year’s contest finals in October. That team member will focus specifically on creating and maintaining investor relationships year-round.
What does 43North look for in quality applicants?
At its core, 43North looks for three basic criteria when recruiting contest applicants.
Ideally, although they’re not rigid requirements, startups who apply each have around three full-time equivalent team members, at least half a million in capital raised and are post-revenue or will have revenue within the next nine months. That’s according to Dominic Costanzo, who started this year as 43North’s vice president of portfolio.
From there, the evaluation process is more qualitative. The organization wants companies with exceptional teams in large, growing markets. But the Buffalo piece is also important.
“So why are they a fit not only for 43North, but for this region?” said Costanzo.
There's also due diligence like calling customers, investors and those who referred the applicants to 43North.
This year, Heidinger asked her team to get to the due diligence part more quickly so that there’s even more time for those background checks.
After a few rounds of cuts, about 15 companies will be asked to come to the Queen City to pitch in person, leading up to the semi-finals and finals held in October at Shea’s Performing Arts Center.
“Often we hear that from founders. ‘You ask for a lot (in due diligence),’ ” she said. “That’s also a process that’s exhausting and isn’t talk about at Shea’s – how much time we spend.”
