The founders of two startups — one of which is based in Chicago — shared the top prize of $500,000 Tuesday night at Barnburner, a pitch competition hosted by fintech company Sweater Ventures in Boulder, Colorado.
Chicago's Grapefruit Health and Sweatpals of Austin, Texas, beat out three other startups that competed Tuesday: EveryKey from Cleveland; SKNMUSE from Los Angeles; and Farmshare from Denver.
Grapefruit Health and Sweatpals split a $500,000 investment from a panel of five judges that represented Sweater Ventures, Antler, Mercury Fund and SUM Ventures. Angel investor Litquidity also joined as a judge and investor. "Lit" is a former investment banker who now anonymously runs a finance meme account and makes angel investments.
"To be one of the winners is exceptionally special. This is absolutely awesome," Grapefruit Health founder Eric Alvarez said on stage at the end of the competition "This is going to make a major difference in our business."
About 200 people gathered in Boulder Theater for the event, which included pitches from and interviews with founders, introductions, and behind-the-scenes videos showing founders preparing for the event at Sweater's offices in Boulder over the past week.
Sweater CEO Jesse Randall described Barnburner as a mix between the ABC reality show "Shark Tank" and NBC's "America's Got Talent." The founders were encouraged to share personal stories rather than give their typical investor pitch, Randall said. They received professional storytelling training as part of their weeklong preparation. They also met with the judges, who performed financial due diligence on the startups throughout the week.
Barnburner kicked off in February. The 500 startups that applied for a chance to pitch at the event were narrowed down to the final five through public voting in Sweater's mobile application. The app recorded tens of thousands of votes, said event emcee Adam Clayton-Holland.
"This is an incredible, high-quality group," said Ryan Sommerville, a partner at Antler, a VC firm based in Boulder. "A tiny percentage of our population is willing to actually take the plunge and build companies and solve problems, and we absolutely need them to. So, agnostic of the result, I think I speak for the panel in saying we're happy to support these entrepreneurs going forward."
Grapefruit Health aims to help solve the staffing shortage in the medical field by training and managing nursing, social work and pharmacy students to see patients remotely on behalf of understaffed medical organizations. Students are matched with patients based on factors like culture, proximity and spoken languages.
Alvarez, a U.S. Air Force veteran with a master's degree in health-care administration, started Grapefruit Health in 2021. Google awarded the startup a $100,000 grant in 2022, and last week, Amazon Web Services selected Grapefruit Health for its accelerator program focused on workforce development.
Grapefruit Health is on track to earn $250,000 in revenue in 2023. Alvarez said that if he won the $500,000, the money would fund the startup through 2024 and allow him to hire for a key role.
"We are imperative. This business model needs to be deployed so we can fix health care," Alvarez said. "We ask you to please invest in us so we have the opportunity to save millions of lives."
The other winner, Sweatpals, launched in Austin, Texas, less than a year ago. Co-founders Salar Shahini and Mandi Zhou started the company as a social network for people to connect through fitness. Their mobile application allows people to find fitness groups and classes, message people, and share their workouts.
Shahini and Zhou both moved to the United States from other countries and found friends within fitness communities.
"When I moved to the United States, I had a really hard time connecting with people because of cultural and language differences," Shahini said. "I tried going to bars and nightclubs, which is not very natural for me. I tried posting in Facebook groups. I tried everything. That all changed once I discovered the running club and the rock climbing community. All of a sudden, I had many friends. ... Not only did the city come alive for me, but I came alive."
In its first several months, Sweatpals has garnered 800 users in Austin and generated $12,000 in revenue. With the winnings from Barnburner, Shahini and Zhou said they could expand Sweatpals into Miami. Their next goal is to bring the service to Denver and Boulder, they said.
"This is validation," Zhou said after being announced as a winner. "People love Sweatpals, and we came a long way with all the votes. We can’t wait to expand Sweatpals to more cities."
Among the other finalists was SNMUSE, a luxury beauty brand founded by Ezinne Iroanya. Iroanya migrated from Nigeria at age 16 to study at the University of Oklahoma, and she founded SKNMUSE after developing her own line of body butters, body oils and perfumes. Her brand is available online at Macy's and will launch in 40 hotels by the end of the year, she said.
Another finalist, Everykey, designs and produces a patented smart key that can unlock devices and log into online accounts. Founder Chris Wentz, who was raised in Boulder, developed the idea for the company during an entrepreneurship class at Case Western Reserve University. The startup so far has earned $3.2 million in revenue and was selected for a $1.25 million contract with the Air Force, Wentz said.
Last to present was Henry Arrowood, the founder of the online farmer's market called Farmshare. Arrowood, who has a background in e-commerce, moved from San Francisco to Montana during the Covid-19 pandemic and worked a side job as a ranch hand. The experience motivated him to help small agricultural producers sell their goods directly to consumers. Farmshare launched its beta version in October with 50 producers, and 650 more are waiting to get onto the platform.
