If you haven’t embarrassed yourself in front of a prominent investor at a local tech conference – can you even call yourself a founder? Awkwardly shuffling about, craning your neck to get a better look at the managing partner whose face you’re trying to match with the photo on your phone. Delivering your cold pitch with fake bravado. Only to stumble on the first question, as you realize they’ve misunderstood your product because the positioning is completely off. It’s initiation rights and a perfectly normal, albeit sometimes unpleasant, learning experience on how to attract investors for first-time founders.
But learning doesn’t pay the bills – the 100 “no”s are only valuable if there’s a “yes” at the end. Moreover, as the person responsible for bringing in capital, you don’t have much space for these types of growth experiences. Even less so today than before, given the ever-fiercer competition for those VC dollars.
With the startup event season rapidly approaching, we talked to three founders who found their investors at conferences to get some practical tips on how they managed to succeed where so many fail. Here are their insights on how to attract investors.
1. Lines, not dots
“As with many things in life, it’s about quality, not quantity. Founders should focus on kindling the relationships they have, rather than rush to expand their network as much as possible. Think lines, not dots,” says Mikus Krams, co-founder of Trace.Space, who raised a $1.5M round pre-MVP – the largest of its kind in the Baltics – after a productive chat with their to-be investors at a conference side-event.
Many founders feel that knowing lots of investors is important and heightens their chances to get noticed. So they enter the conference circuit aiming to establish as many connections as possible. But in reality, you only need really good relationships with a few people – who also have their own network and relationships. So instead of trying to meet as many investors as possible, it’s better to identify a few with whom you’re on the same wavelength, then maintain those connections by meeting them repeatedly at various events.
“Fundraising in one region, you’ll run into the same investors again and again. Connect with them. Invite them to watch you pitch. Enquire what other events they’re attending – and meet them there,” suggests Hyperjob Co-founder and CEO Jānis Kreilis, who’s just coming off a €435K round, led by SMOK Ventures.
2. It’s about you – not your idea
Your idea will mean diddly-squat if you cannot prove that you’re the right person to bring it to life. “At a conference, the primary goal of any founder talking to an investor is to demonstrate you’re a competent, knowledgeable, and interesting individual,” begins Trace.Space’s Mikus. “Try to distance yourself from your role as a founder and focus on presenting yourself as an expert.”
Everyone at a conference is in the business of problem-solving and, as a founder, you should have some particular expertise – be it sales, finances, people management, or anything else – that has applicability beyond your own startup. This is your trump card since these are all issues the investor’s portfolio companies may also be struggling with.
For instance, “I saw company A in your portfolio, how do you solve X?”, is a fantastic direction to take a conversion with an investor, according to Mikus Krams. It demonstrates research, allows you to showcase your knowledge, and may put you in a position to help out the investor you’re trying to woo. At the same time, be humble and open to their experience, indicating you’re willing to learn and seek practical insights to advance your own project.
3. Don’t underestimate the local scene
Every region has kingmakers – ecosystem leaders, investors, and officials that tend to be the first point of contact for VCs eyeing a market they’re not familiar with. Though they might not write you a ticket, getting in their good graces can be a game-changer. “It’s important to be noticed locally so that the local touchpoints for foreign investors can tell them about you,” says Mikus Opelts, CEO of Giraffe360, who benefitted from this type of warm intro at TechChill, a startup event in the Baltics, which led to a $4.5M seed round.
While the glitz and glamor of international startup events may be hard to turn down, don’t forget to do the rounds at local events – especially those frequented by your region’s kingmakers. Lay your game on the region’s leaders with the same thoroughness as you would a potential investor and don’t worry about being a big fish in a small pond, as those are the easiest to notice.
4. Understand the timing
Nobody makes investment decisions at a conference, yet aspiring founders often pitch their companies in the same way they would do at a pitch battle – as if expecting a yes or no answer. “At a conference, your goal isn’t to secure an investment. Because you won’t. Your goal is to set up a call or a meeting with the investor for when they’re at work,” says Mikus Krams.
When you’re fundraising, you’re in it for the long haul. It can take multiple events to get a conversation rolling and if there’s interest in your project, it will likely develop further over several months. Act accordingly – be cool, be ready for prolonged talks, and approach investors like potential partners, not buyers. You’re looking for a long-term relationship, not a one-night stand. Your goal is to show yourself as someone that investors want to work with, so – beyond tip #2 – don’t underestimate the role of casual socializing. But always keep in mind that this isn’t a transactional process. Like any relationship, it takes time and the right timing.
5. Stay on top of the mind
The points discussed thus far on how to attract investors revolve around becoming a known quantity. Once people start recognizing you, doors open. And there’s no secret to how to achieve this – it involves hard work, attending as many events as possible (within the region you’re targeting), and participating in them to the fullest, which includes speed-dating, pitch battles, side events, afterparties, and everything else.
“Catching up with the same investors event after event, while actively participating in pitch battles, allowed them to see first-hand our progress, evolution, and dedication,” recalls Hyperjob’s Jānis. “We would always invite them to our pitches, and, before long, they were filming our presentations to send to their partners.”
And it doesn’t end once the funds are secured. “Though we’re not actively raising right now, I’m still actively participating in the conference circuit. Staying top of mind has been invaluable and it’s an advantage I don’t plan to let go of – everyone should be doing this even when they’re not raising to lay the groundwork for when they do,” concludes Jānis.
Hunting season is open
With hordes of events on the horizon, it’s the busy season for founders. Conferences and other ecosystem events are invaluable for building relationships and getting your foot in the door. Clearly, persistence is key, but it’s not about throwing things at the wall and seeing what sticks. The results will only come with a measured and strategic approach.