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Startups are being advised to conduct background research on potential investors before pitching their technology wares to them.
That was the view of Sharlene Lopez, founder of digital agency Eye Catcher, and several other panellists at the TechXLR8 conference during London Tech Week, which featured discussions on cloud, virtual reality and the internet of things (IoT).
“Having done your research beforehand, you would know in your presentation the kinds of things that they might ask you – be prepared for those,” said Lopez.
“And personally research them as well – find out their background, find out their interests, the groups that they potentially belong to on LinkedIn and on Facebook, and see if you can bring your story in to cover those.”
Jurgen Appelo, CEO of startup scale-up support provider Agility Scales, said different investors might be a better fit for organisations at different stages of their development, and background checks help to ensure startups are pitching to the right investors.
“VCs [venture capitalists] are rarely interested in your idea when you’re just starting out, so we have to understand where the investors fit in at what stage and reach out to the right ones,” said Appelo.
Imo Berman, partner at startup support provider Think Plan Thrive, expanded on this theme by advising startups to also spend time researching who the investor’s audience is.
“You have to get to know your investor audience and really understand what it is they’re looking for and what motivates them,” she said.
Lopez added that, ideally, startups should try to make sure investors remember one key thing about their firm once the pitch is over, if they want to stand out from the crowd.
“What’s the one thing you want them to understand when they walk out of the room?” she said. “If they’re in the lift on the way home, or on the way down after hearing a pitch and you overhear them talking to each other – what is it you want them to say?”
Helping startups to succeed and grow was a recurring theme at this year’s London Tech Week, which took place on 11-17 June. The government marked the start of the event by pledging to invest £2.5bn in programmes to help UK firms with high growth potential to scale up their plans.
It also gave details of its forthcoming startup visa programme, due to go live next spring, which is designed to make it easier for overseas entrepreneurs and skilled workers to join the UK startup scene.
Appelo said that, along with accessing funding and creating a viable product, recruitment is one of biggest challenges faced by startups.
That is backed by research from Studio Graphene, in which 30% of London startups said they felt their growth potential was being hindered by their inability to recruit the right staff, and 39% said they found it difficult to hire people with the right mentality to join a startup.
To meet these challenges, Appelo encouraged startups to get networking, because they might run into people who are a great fit for their organisation but are not necessarily in the market for a new job right now.
“You have to learn how to do networking because the best people for your team are not looking for new jobs right now – they have fine jobs,” he said. “You need to find those people at events like TechXLR8 and other kinds of networking events and reach out to them.”
Appelo also recommended making the recruitment process enjoyable for candidates, so that even if they are rejected, they will spread a positive view of the brand.
Joining an accelerator
Joining an accelerator programme is a step many startups take to help them scale up their operation and refine their products – but not all are created equal.
For that reason, Tod O’Brien, managing director of the Startupbootcamp Smart City accelerator, said startups should shop around for a programme that best suits their needs.
“If you’re a startup, really do your research and interview us,” he said. “I see this done wrongly, I see a lot of accelerator programmes saying ‘Are you good enough to come into our accelerator?’. Really, you should be saying ‘Is this accelerator good enough for me as an entrepreneur?’.
“If you want to know what the right time is, talk to a whole bunch of accelerators and a whole bunch of people who’ve been through accelerators and then you’ll know if your company is in the right space.”
Many accelerator programmes sell themselves on the mentoring support they offer participants, but not enough startups make the best use of this help, said O’Brien.
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“The biggest mistake I see is that startups will go in and talk to somebody [a mentor] and find out they’re great and they’ve got all these connections, but the startups haven’t really thought through what they could actually do with them and so nothing actually happens,” he said.
“If you go to a mentor, a partner or somebody, with a couple of ideas and say ‘Here’s a couple of things we can do with you and the people you know’, then it gets their minds turning and they can say ‘No, that’s not the right thing – but this is’. So at least you move forward.”
On the mentoring front, Mat Hunter, managing director of hardware accelerator Central Research Laboratory, said entrepreneurs should come across as enthusiastic about the work they do, but also open to receiving constructive criticism.
“Entrepreneurs have to be really confident and have to really believe in their ideas,” he said. “But it’s a pretty tough thing to believe fervently in what you say but also have your ears open to listen to someone else’s point of view, especially if the whole point of an accelerator is to draw more knowledge and skills around you.”