Often entrepreneurs attend conferences and industry meetings where they have an opportunity to network with and meet investors. But most often these opportunities are not well utilized and entrepreneurs fail to get the attention of those investors.
Here’s why:
Investors are flooded with proposals and through their day they get many calls, mails and face-to-face interactions where entrepreneurs request for meetings.
It is not practically possible for investors to accept all meeting requests, and therefore they end up using some criteria to filter to select whom they would like to meet. And, in the absence of any other criteria during one-on-one interactions in business conferences, the criteria used is the entrepreneur’s ability to clearly articulate the concept and the passion. I.e. During the short networking interactions at conferences, investors tend to seek further information (i.e. either a longer conversation rather than just giving a card and saying “Send me a mail and we will see” or calling for a follow up meeting) from those who leave them with the feeling “Ah, this seems like a good concept, seems to have a good business case and this person seems to be sensible and smart enough to build a business”.
Here’s a list of things you may want to consider when attending networking meetings where you may meet investors: The key message in all these points is that you need to PREPARE your short pitch, practice it and deliver it as if it is extempore.
- Keep a 1-line descriptor about your company ready. When someone asks what you do, rather than going into a long story, you should be able to say in one short sentence exactly what you do. (E.g. “We help schools manage their healthcare programs”)).
- Convert this statement into an introduction line e.g. “Hi, I am Ramesn, co-founder of The Health Hub. We manage health & wellness programs for schols”. Pause. Wait for the other person to respond. Only if there is interest and if the conversation is continuing, then follow it up with more information. Else, it becomes a monologue with just meaningless nods and ‘right, right” type of sounds from the listener. Not all investors attend conferences to seek entrepreneurs and hence, even if your concept is interesting, they may not be receptive at that forum. In such cases, it is best to leave your business card and move on and follow-up later with an e-mail.
At the back of your business card, put a 2-3 line descriptor of what you do. Because investors meet with a number of entrepreneurs, it is difficult for them to remember who you were, especially if your company name does not explain your business e.g. if your company name was Travel Guru, you may not need a one line descriptor. But if your company’s name were Clove Education or something that is generic, you may want to put a descriptor so that the investor later remembers you as that interesting person whom they would like to have a follow-up meeting with.
- If there is interest in continuing the conversation, then provide additional information. E.g. “Our programs are quite popular with high end schools, and we have repeat contracts from all our current clients. We are now in our expansion phase, and that’s why I am at this conference… to present our business case to potential investors.”. From here onwards, see how the conversation goes. But be prepared with the list of things YOU want to discuss and want to highlight.
- Make a list of key messages and highlights that you want to mention during your conversation
- e.g. Entrepreneurs background (if it is relevant to what you do e.g. If you have worked at e-bay before and are now starting an e-commerce company, it makes sense to state that. However, if you were working in a healthcare company, and now starting an e-commerce venture, that may not be the most important point to state at the first meeting)
- What have you done so far: This could be about the background research you have done, the prototype you have built, the concept validation you may have done, the traction you may have got, the initial feedback or orders from a few initial customers. i.e. you may want to be prepared in your mind with a list of things that you have done in your entrepreneurial journey. (And remember, the journey begins not from the moment you start your company, but from the moment you decided to become an entrepreneur).
- What are your aspirations and goals? Investors like startups with large aspirations. But when stating your aspirations and goals, be as specific as possible. E.g. Saying “We want to the be the leading e-commerce company in the school supplies segment” is not a good enough statement for anyone. You may want to say “In the next 3 years, we aim to be among the top 3 school supplies businesses online. And our plan is to get to about USD 10 million in 3 years, and in the next 10 years or so we aspire to be anywhere upwards of USD 250mn in revenues. We believe the market potential in India itself to be about USD 1 billion”
- How much funding are you looking for and what will the monies be used for: Specificity in this answer is key. Different investors invest in different stages of a venture and hence it is important for them to assess whether your stage is right for them, and if the amount of investment you seek within the range that they invest in. (Often entrepreneurs end up asking for angel/seed-stage funding sums, which are often much lower, from VCs who typically invest higher sums of money. If you need USD 50,000 to get going, there is no point in seeking that from an investor who typically invests upwards of USD 1 – 2 million. Therefore, do research on different investors so that you are well aware of whom to target.).
- Be specific about how much money you need e.g. “We are currently past our concept stage. The model is proven and we are now ready to go beyond the pilot stage. We are now looking for USD 250,000. This will be used for building our team for expanding our reach to 5 more cities and marketing. This money will last us for 18 months, where we plan to raise another round for growth.”
Most importantly, after attending business conferences and industry events, be disciplined about writing to those you interacted with. Keep the mail message short and personal. DO NOT CUT PASTE A STANDARD MESSAGE ABOUT YOUR ORGANIZATION. No one reads through that. The intention of the follow-up e-mail is NOT to spread information about your company. It is to gain their attention and establish a relationship, or at least get an opportunity for a follow-up meeting.
Happy networking.