Ask the VC: Tactical Tips for Taking Advantage of Demo Days or Any Other Investor Hotspots
Demo days are a funny thing. Everyone seems to think it’s about bringing startups and investors together but my observation is that many of these events turn out to be nothing more than a social event for investors (and wanna-be investors) to catch up with each other. If you’re the startup trying to raise money at your demo day event, you’re a sucker. Smart founders use demo days as forcing functions when they’re generating heat for their startup.
I’ve been to a number of demo days over the past few years and helped host ours here at 500. A couple of observations for both founders and the good people that run these events:
If you remember nothing else, your #1 goal in fundraising (and in life) is: don’t be weird. People invest in other people, despite what you might have read elsewhere.
Some additional tips:
- Keep the pitch tight, three minutes is the max. Your pitch is traction, problem and solution – in that order. If you finish early, you’re a winner. Remember that the goal of the presentation is to get the meeting, not to convince them to invest from the comfort of their chair.
- If you’re looking for sample decks and real pitch videos, check out out slideshare.net/500startups and livestream.com/500startups. We post everything there within ~24 hour of our events so you’ll always have the latest stuff.
- Practice, practice, practice. At 500 Startups, it’s not uncommon for presenters to go through 40 hours of practice (usually in 3 hour blocks over the course of 2-3 weeks).
- If your team is hanging out together during the demo day, you’re doing it wrong. Spread out, engage the audience and bring ‘em back to the person leading the fundraising for your team.
- When in doubt, tag team with someone from *another* startup. Talk each other up, it’s much more refreshing to an investor than pitching your own startup. Bonus points if you pair up with someone that’s at a startup that has already raised money from known investors.
- Don’t waste space on your slides. Make sure your twitter handle and/or email (always founders@COMPANY.com to keep things simple) address are in the headers of every slide. Don’t thank people at the end of your pitch, make your ask instead.
- Get commitments for your round before demo day. Ideally, you want to close your pitch with something like “We’re raising $X and Y% is committed. Come talk to us afterwards if you’d like to be involved.”
- Don’t spend more than 15 minutes with any one investor during the event. Setup a coffee meeting for the next day, but work the room during the event.
People Running The Show
If you’re brave enough to put on an event to bring founders and investors together, you deserve a pat on the back (and probably a few beers). At the end of the day, you should spend an awful lot of time thinking about how to incentivize both founders and investors to want to meet each other.
- Invest in quality AV. No awkward silences: use music for the transitions, preferably upbeat music that the presenters choose and get a DJ to handle the transitions between mics and music. You’ll make liven up the event, keep people’s energy high and it’s the easiest way to make the event more polished.
- Pro tip: USE MUSIC FOR THE TRANSITIONS BETWEEN PRESENTERS. I really can’t stress this enough — it’s hard to describe but you’ll know what I mean when you see it.
- Be ruthless on the invite list - priority goes to investors that have written checks in the recent past. Your startups will notice. The investors in the audience will notice. Everyone will be much happier.
- If a founder crashes your demo day, keep them out. Each one you let in will mean one less conversation that your presenting founders will get to have with meaningful investors.
- If an investor crashes your demo day, require them to show you their AngelList profile. It sets the right tone before they walk in the door.
- Each type of attendee should have a different colored name badge. One for staff, one for press, one for investors, one for founders… you get the idea.
- Try to do more than one demo day. Preferably in a very short amount of time. At 500 Startups, we run our accelerator cohorts through four separate demo days within a ~10 day period on both coasts of the US. Not only does it expose the startups to a broader range of investors but it creates a sense of pressure for the investors in the audience (“hmm… I better go talk to these founders because they’re about to see 200 more investors tomorrow…”).
- This probably goes without saying but try to limit the booze until the pitches are done. Enough said.
- For the love of all that is holy, make sure the right people are coaching your presenters. (Hint: they’re probably not your event sponsors.) Bring in successful founders that have raised money — they’ll have the most relevant advice. Maybe a few investors that have made multiple investments in the past few months.
Raising money is getting tougher: more startups from all over the world are competing for a finite pool of investor money. Founders need to tell crisp stories and make the most of the 2-3 minutes attention spans. Event producers need to create useful events that attract the best people from both sides of the table. Hopefully some of these tips are helpful.
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