The Hackathon Experience Is a Hack

Where and how did that happen? What was the name of the startup? Who organized the event?

That's not the point. I'm sure OP would've been fine loosing, as long as it was in fair competition.

I've seen this before. I was involved in one where the winning team had been working for months beforehand (their website was registered > 6mo before the event), had prepared presentation materials far before the event including design mockups, and presented with nothing more than a pre-cooked video that was looked manipulated to show "working" code. None of us knew for sure, but it looked like they had just built static HTML pages and transitioned between them.

For those of us who had built working products, it felt more than a bit cheap. We saw some great code and very little of it was recognized.

I believe the issue is one of expectations and marketing for these events. They are pitched as "hackathons" and try very hard to attract engineers, as you simply can't have the event without coders. Therefore, engineers reasonably expect an event where the best code wins. After all, it's called a "hackathon", not a "meet & greet with investors" or even a "startup weekend". In the end, it just felt like the judges were putting themselves into the mindset of investors, and in that case, obviously the team that has prepared for months beforehand will win. But to the coders, we felt cheated, and that they had completely missed the point.

They not only share their name with the existing startup, they are that startup:

    The winning app makes it easy for consumers to find places to withdraw 
    small amounts of cash at a low cost, using businesses in their own 
    neighborhood and a PayPal technology that is very secure, said Alexander 
    Sjögren, who developed the app with Jose Pimienta and Osniel Gonzalez. 
    Sjögren is with the Miami company YellowPepper, which offers mobile 
    banking and payment solutions in Latin America. Pimienta and Gonzalez 
    co-founded Vinylfy, a startup catering to vinyl-record enthusiasts. [1]

YellowPepper is:

    About YellowPepper
    YellowPepper Mobile Financial Solutions provides products and services 
    that enable mobile financial transactions between financial institutions 
    (banks), businesses, and consumers in Latin America. With 1.5 million 
    users, YellowPepper operates in Ecuador, Colombia, Bolivia, Guatemala, 
    Peru, and Panama as a service provider for more than 50 financial and 
    non-financial institutions. For more information, log on to 
    www.yellowpepper.com. [2]

1. http://www.miamiherald.com/2013/08/25/3585797/hackers-emerge...

2. http://www.prnewswire.com/news-releases/yellowpepper-and-fun...

Off-topic: The blog title is a perfect example to demonstrate why to never use line-height in the place of margin.