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If you are looking to raise money for your event tech company these tips will help you to position your company in the right way and set expectations with future investors and customers.
After 35+ angel investments and previous experience as Founder and CEO on different startups backed by strategic and institutional investors, I created a simple list of 10 tips that can help entrepreneurs to save time and set realistic expectations in front of investors.
Fix a REAL and BIG Problem Around Live Events
There are still huge problems to be fixed around the live events industry. I’m still super optimistic about great entrepreneurs creating amazing companies to fix those problems and help organizers, visitors and exhibitors/sponsors to have a much better live event experience using event tech.
Have Your MVP Ready Before You Pitch Investors
The days of raising money with Powerpoint slides and your idea are over. Today building an MVP (Minimum Viable Product) that can do a solid demo is critical to generate the confidence of investors. You can build your MVP with very little money and limited technical knowledge. You will learn a lot around the process. Learn simple ways to do this reading books like The lean startup or similar literature.
Your company must solve a real problem and ideally help organizers to generate incremental revenues and/or efficiencies (cost savings) for their business. These are key priorities for each organizer today and technology must be a tool in helping with these priorities.
Understand (in full details) Your Competition
I hate when entrepreneurs tell me that their startup has “no competition at all”. 99% of the time that’s not true and they have simply not invested enough time around competitive analysis. There is nothing wrong with having competitors and the live events industry is big enough to accommodate a couple of successful companies in many sub categories.
Have the Right Skill Sets Among Founders/Key Employees
In the ideal world, I would like to see a technical co-founder in partnership with a business development (amazing sales person) co-founder. Having a strong technical founder helps a lot in terms of speed and quality around the product and having a strong sales/marketing founder accelerates go-to-market and product feedback.
Be Committed for the Long Haul in the “Real Startup World”
Startups may sound sexy and glamorous but they are not. Please believe me. Low (or non-existing) salaries for long periods of time, endless hours at the office and on the road, permanent rejection on your idea and product (until you validate with an initial 5-10 real customers telling your story), low (or non-existing) resources, and many other challenges are a daily reality of the startup world. If you are not ready to live this world at least for a couple of tough years until you understand the opportunity and adjust your product and go to market strategy, you should probably keep your current job and watch shark tank on your weekends. You will be a much happier person!
Raise Money, Only if you Need it, from the Right People, at the Right Time
I did my first two startups with less than $50k from my own savings and raised very little money after that from strategic angel investors before selling both companies to strategic buyers many years later. I also co-founded a company where we raised institutional and strategic money to accelerate growth dramatically from the early days. I joined Boards and invested (time and money) in companies that raised hundreds of millions of dollars from tier A investors. There is no simple recipe for raising money.
From my perspective, it’s an art and not a science but there is one simple rule (at least for me) and it’s common sense. I would not suggest to any founder to raise money until he or she understand “why we need to raise money”, “how much money”, “when and how to raise” and from “which sort of investors”. Rich uncles or friends are great but they usually don’t add tons of value and institutional investors are not the right fit for every founder. If your company is not positioned to scale into a really big business there is a strong chance that you should not raise money.
Sales Fix Everything
Call me “old school” but I love companies with revenues ☺
Be Smart with your Intro Strategy
Every decent investor receives dozens or hundreds of investor decks, unsolicited emails, Facebook, LinkedIn, Twitter, etc trying to convince him that this startup (your name) is the next “big thing”. I almost never consider a deck or take a call or meeting if I don’t have a warm intro from someone that I trust telling me that I should look at this particular opportunity. Time is the most important asset for every human being and investors and entrepreneurs are not an exception and you want to invest your time in the right way. Build and use your “trust network” in the right way and don’t waste opportunities with cold emails or Facebook messages if you want to reach that particular investor. Ask an entrepreneur from his portfolio, a customer, a co-investor or a friend of this investor to do an intro for you.
Be Persistent, Curious and Restless
As I mentioned on tip #6 entrepreneurship is not a “cool and fast way to make money”. It’s a long, tough and challenging decision and if you are not ready to work hard you probably have much better options for your career. If you are not 100% committed and passionate about your company you are not going to be able to attract the right team, customers, partners and investors.
I hope that some of these concepts will be useful for people looking to launch their own companies and entrepreneurs who are already building their business. I launched my first venture when I was 17 years old. I will be 50 years old this year and I still love building companies and working with amazing, creative and passionate founders. I would not change this for anything else.
I’m convinced that our industry needs more and better entrepreneurs fixing all those problems that we presented at the very beginning of this article and I’m bullish about the future of the event tech category as a critical part of the live events industry.