Convertible Notes and Startup Funding
February 12, 2025
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Start-ups connect with large corporations in many ways. The most common way for start-ups to connect with their larger counterparts is when they try to raise funds from these companies. It is common for start-up companies to approach bigger firms in order to pitch their business. However, a lot has changed in the start-up community over the past few years including the way in which start-ups interact with a business. The modern world is now witnessing a new trend called reverse pitching which is redefining the way in which start-ups interact with mega-corporations.
In this article, we will have a closer look at what reverse pitching is as well as some of the pros and cons which reverse pitching has to offer.
As the name suggests, reverse pitching is the first stage of a potential partnership between two businesses i.e. one business is pitching its ideas to the other. However, instead of start-ups pitching their ideas, the tables are turned in this setup.
In a typical reverse pitching set-up, a highly established corporation calls a meeting with multiple start-up companies. They then share their problem statements with such start-ups. The start-ups then take some time in order to develop a prototype or a proof of concept. After making some progress, these start-ups once again connect with the multinational corporation. At this meeting, the multinational assesses the results which have been created by start-ups. If they find something unique, then the company decides to partner with the start-up in order to bring the idea to life.
Reverse pitching is a fairly recent concept. However, it has been gaining popularity very quickly. This is the result of the various advantages which are offered by this model. Some of the important advantages have been listed below:
Reverse pitching has a lot of disadvantages as well. It is important for corporations and start-ups to be aware of these disadvantages. Some of them have been listed below:
The fact of the matter is that reverse pitching is not worthwhile for all companies and all entrepreneurs. However, there is a very specific subset of people who can benefit from using this new process. This is the reason that the popularity of reverse pitching is increasing at an astounding pace.
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