How Can a Startup Prepare for a High-Profile Demo Day?

In this competitive world full of great ideas, startup founders can no longer depend on just an idea to ensure growth. Developing the idea and making it into a running business needs resources. Today, the key to success lies in getting in the eyeline of the right investors and convincing them that the idea can deliver an impressive return on investment.

Early-stage investors have always been crucial for startup success. These investments, however, are risky. Early-stage startups offer little financial data and have no history of success to demonstrate mainly because they are trying to do something new. That’s where demo days come in. These occasions bring together promising startups and eager investors in an accelerated interaction designed to facilitate decision-making and alliance-building.

To get an investor to sign on the dotted line, it becomes essential for startups to deliver the right pieces of information in the right manner. However, the window of time to make an impact on the demo day is very small. Entrepreneurs as such need to do more than prepare an impressive slide deck for demo day success. The preparation for demo day begins much earlier.

Here are some of the key areas to focus on to impress the investors and get the money rolling.

Showcase powerful leadership and financial discipline:

Demonstrating intelligent, strategic, and success-oriented leadership is crucial to gaining positive investor attention during the demo day. Leveraging the leadership team's professional experience and having the right set of competencies of the leaders elevate investor interest.

Entrepreneurs with demonstrable success in the past as founders or in leadership positions generate more investor confidence as this reflects their dependability and capacity for future success. The company founders and leadership team also need to show their ability to exercise strong financial discipline in meeting forecasted goals, using financial resources wisely, hiring strategically and behind the curve, budgeting, and reviewing capital expenditures regularly.

On demo day, founders need to have the data in hand that demonstrates how they have (or intend to) managed and maintained financial discipline to increase investor interest.

Optimize everything:

Before heading to demo day, startup entrepreneurs and founders need to identify optimization opportunities. Be it operations, sales and marketing productivity, finances, or hiring, it is essential to showcase clear, well-defined, and optimized processes to draw positive investor attention.

Founders and leadership teams of startups can leverage strong mentor networks and evaluators to identify optimization opportunities and ensure that they have the answers to all possible questions that fly their way on demo day. Having quantified data on how things have been optimized increases investor confidence and improves the chances of a successful demo day.

Prepare the data:

Investors are looking at putting their money into businesses that can scale and provide a return on their investment. As such, start-up founders need to be prepared to answer investor questions with facts and not feelings on demo day. Data on the company's potential or traction in the market, funding goals, hiring plans, etc. can be invaluable on demo day.

Demo day is almost like a debutante ball where you can woo investors with the data. Having a pool of clients, proof of consumer interest, clear and detailed marketing plans, and financial projections are critical for an impactful demo day.

Get strategic insights:

Founders need to engage with industry experts and thought leaders and forge meaningful connections and linkages before demo day. These activities increase their depth of knowledge and allow them to craft presentations that deliver greater impact and showcase entrepreneur expertise.

Potential investors know that a business cannot be built in a vacuum and a well-connected network increases the chances of investment. Leveraging opportunities to develop a well-connected network and finding mentors in the industry helps entrepreneurs develop investor confidence to finance their businesses.

Identifying how to break the familiarity bias:

Investors are usually interested in putting their money into markets that they understand or are more familiar with. They do so to reduce risks and familiarity often is the safest option. Most startup investors look to invest in sectors that fit their expertise. This is also because investors know what the business will need to become profitable in the sector and yield an ROI.

So, if the startup operates in a sector that is unfamiliar to the investors then it becomes essential to have all the answers that will help combat this familiarity bias. Entrepreneurs, as such, have to come armed with thoroughly researched and detailed explanations of the industry, buyer personas, and relation to historical markets and present these in a compelling way to showcase revenue opportunities.

To sum up:

Along with these things, it also helps to build a viable social presence and use these channels to create a positive online footprint. Social channels can be used to explain the business clearly, emphasize progress, generate buzz, and showcase the company roadmap.

Having clarity on what you want to get out of demo day also impacts success rates. It is most important, however, to have a Plan B in place for the demo day should things head southwards. It must be noted that a hurdle does not mean the end of the road, but rather, an opportunity to charter a clearer path for the startup.

Startup founders can leverage demo day opportunities even after they are over. Following up with investors, sending out meeting requests, and thank you notes play a big role in maximizing newly acquired connections with investors and increasing the chances of getting meetings with them.

When going for demo day, founders need to know that while the business idea is important, investors not only look at the idea but the entrepreneur as their investment opportunity. Investors usually bet on the jockey and not the horse. Connect with our experts at Ontropi and see how our cutting-edge AI/Digital Platform can make demo days successful for your startup.