Over 300 investors and startup enthusiasts were at the 500 startups demo day yesterday at the Microsoft campus in Mountain View. There is extensive coverage on all the major publications including TC, VB, Forbes, Biz Journals and TNW.
17 of the 30+ companies presenting were from outside the US, which was absolutely awesome. The 5 standout companies from my perspective were CompStak (US), Kickfolio (AUS), WalletKit (IN) and Supply Hog (US) and Gaze Metrix (IN). They represented a combination of great entrepreneurs, going after a large market, where you can make money, and with sufficient barriers given their stage of operation.
There are 3 observations that I had which might be best used by entrepreneurs who are pitching at demo day and want to hustle and help move their funding to closure quickly.
If you are a startup entrepreneur, at the demo day, its important to spend quality time (10-15 min at best is all you’ll get) with folks who you might be able to get follow on meetings in the next few weeks to help close your round. Identifying them and spending enough time with them should be your priority. The question is “Who are they” and “How do you identify them”? Its not easy for the first time entrepreneur, but you should look for seed-stage investors not big name venture investors or large funds.
First, realize that not all of the “investors” are really looking to invest. I had conversations for about 5-12 min with about 30-40 of them and over 50% were at the event to “check out what’s going on” or “network with other investors”. Typically these were associates and vice presidents at very large funds (any VC firm with over $200 Million raised). They are hoping to put new promising companies on their “watch list” alone. They rarely make seed stage investments, so dont bother spending too much time with them to “get their feedback”. I know it sounds nice if you say you talked to “investor X at some large and well known VC fund”, but that high wears off faster than the beer served at the event.
Second, since you will have with you a list of potential investors, coming to the demo day. I recommend you spend a few minutes making your target list and doing some research on them so you and your team can make sure you meet them at the event. The best case scenario is if you are interested in an individual and they liked what you said, so they reach out to you during the break or after the event.
The most likely scenario is that there are many others trying to get their attention, so you might miss getting a chance to get their card or setup a conversation for later. The best way to do this research is filter the possible investors attending on AngelList. Dont just look at their investments, but filter by types of companies, the stage and industry (this you may have to do manually in a spreadsheet).
Third, dont expect to close at the event, but expect a lot of follow on interest via email, angel list and other sources. Realistically most investors (yes, even in the valley, which surprises most people) take between 1 to 3 months after meeting you at the demo day to close – which compares to between 3-6 months in India.