tSR Compo Vol.13: Pokémon!

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Are fan evolutions/pre-evolutions okay?

Yes. You could even make custom sprites of existing Pokémon since the main purpose of these competitions is to get people to sprite ;-)

Does this have to be in a pokemon style?

No! You can, but there's no need to. The perspective should work with the Pokémon battle screen layout, but aside from that, you're free to choose whatever style you want.