Turning the Tables: How to Make Venture Capitalists Pitch You

I’m returning to Capital on Stage this fall in New York. Last year, 19 other VC fund Partners and I pitched to 170 attendees; this year the conference organizers expect a similar turnout. You can see online my own pitch and all the other VCs pitching last year in NY  . To attend, apply via the CapitalonStage.com website.

I like the psychology of forcing VCs to pitch to entrepreneurs, so wanted to share the results of an email interview I held with Arjen Strijker, Founder of Capital On Stage (also posted on Forbes):

Q: What was the inspiration for starting Capital on Stage?

A: We wanted to create a physical event where investors would be in the spotlight, explaining more about who they are as a person and how they can help besides just providing a cash injection to startups. VC websites generally give poor insight in what they really are about. Also, at entrepreneur-related conferences participating investors typically remain somewhat anonymous and the attending startups need to go out of their way to get just a short meeting with an investor.

By starting Capital on Stage we responded to these issues, which resulted directly in more efficient dealmaking clearing some of the “mystique” around venture capitalists.

Q: How does your model compare with other conferences, and why?

We are different from other conferences, because we flipped the traditional pitching model where startups pitch for money at a rate of one investor per week or even per month. At Capital on Stage, 20 investors pitch on stage to startups in less than 5 minutes – no slides allowed. Their presentations give valuable insight to any founder looking to raised a(nother) round of funding. On our stage you can see most VCs talk about personal views and experiences that cannot be found on their company websites, or elsewhere online.

The success behind our model depends as much on the model itself, as the quality of our audience. We base everything on two key pillars:

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1) High quality audience – always

We never compromise on the quality of the audience. This means that we tend to say “no”, a lot! Only 20 venture capitalists and up to 200 tech startup founders (ready for funding above seed-stage) receive an invitation. Investors are selected up front, and exclusively invited via word of mouth (mostly via existing VCs in the network). Startup founders need to apply via our website. We have tight rules: One founder per company may participate, no more. Every founder needs to provide us with proof of actually being ready to get funded between USD400.000 and USD10mm. Besides that, they are all screened on having an existing company, product, and/or team in place. We don’t grant access to anyone with just “an idea” – if we’d allow that, then the entire world population would qualify.

2) Deliver the highest conference experience

Big brands host our conferences. Venue hosts included well-known law firms such as Goodwin Procter, who host us annually in the New York Times building, Norton Rose Fulbright who host us in London every year, or Hengeler Mueller who host us in Berlin. Google will host our upcoming Singapore conference in their headquarters at Marina Bay on September 24. Being hosted inside these great venues we know security, catering, and overall services are delivered at the highest level, and we can focus on bringing the greatest players in venture capital and the brightest tech startup founders together.

Q: How is the state of Capital On Stage today different from what it was at inception? What learnings did you have?

A: We learned many things and we still see ourselves as a startup too. We’ve become much better at managing expectations of all our stakeholders, as well as managing our relatively small community of founders, investors, sponsors, and partners. One thing is the Open Office Hours in the morning of every conference, where startups can meet 2 VCs of their choice for 15 minutes each. Managing these 200+ meetings during 9am and 12noon is always a massive challenge, but we’ve improved the set up a lot. For the coordination of the Open Office Hours we’ve been using (and improving) libersy.com, combined with CRM tool Highrise and email campaign manager Campaignmonitor.

We also have a long-term deal in place with DealMarket.com, a leading marketplace for PE and VC deals. We use their DealMarket Office product for the startup application process. As every startup needs to apply and be screened by us manually, we needed a solid system to process all these applications. DealMarket customized this need for us and the process from application, to selection, and eventually signup is now (nearly) automated.

Q: How does your audiences differ across countries?

A: The most obvious difference is the size of overall investments in technology, the US still investing more than anywhere else. But then, the US also seems to be less concerned by the introduction and popularity of crowdfunding and other alternatives to venture capital and are still willing to take more risk. In Asia and Europe however, investors tend to be more cautious, take more time and are aware and concerned about the market changes.

With the Startups, we’ve noticed diverse techniques in how they approach Investors. In New York for example, the founders pitch their ideas in a much more informal way than in Berlin. This could also be cultural, because every country has its own set of unwritten rules on how one should behave. This is important to understand because at each conference we have more than 16 nationalities represented.

Q: What are entrepreneurs looking for in VCs? (Separate what looks good in a 5 minute pitch, vs. what really happens in a 10 year relationship)

A: Humanity! Investors generally have a reputation of being untouchable and unreachable. When they get up in front of 200 founders; all keen to know exactly what they’ll bring to the relationship, their expectations and what they want, this untouchable persona seems to melt away. Pitching is hard, and seeing the VCs do it makes an investor easier to approach. Our Open Office Hour sessions in the morning of the conference give every founder a guaranteed 15 minute meeting with their top 2 investors. This helps founders (who may be less confident networkers) a way to connect and meet investors in a more organised way. By the time our cocktail party starts, founders have witnessed all the investors pitch and have met with two “untouchables”. By this time everyone is feeling more connected and on the same level.

Q: Why does the startup world have so many conferences?

It’s obvious that there’s a massive gap between the world investors live in, and the world in which (bootstrapping) startup founders live in.

It’s a fact that different people will never fully understand each others’ worlds. For example, a well-known cliche is that older people never seem to fully understand youngsters. This is normal and also a reason why investors are often hiring (very) young talent to attract other young talent. On other fronts, just compare investors and startups with their lifestyles, income, friends, age, and experiences. Startups and investors are -and will always be- a different breed, even though most investors in the technology scene became a VC after successfully exiting their startup.

Now, to really understand someone else’s world, one should meet as many people from “the other world” to learn from them. Today this is still done best at niche, physical conferences. What everyone in this business has in common is that we embrace risk and actively want to change the existing, because it creates excitement within us. Excitement is just a more practical term for happiness. So you could argue that attending conferences could actively make people happier.

Q: I’d also add that people who work at large companies do huge amounts of internal networking as part of their job. GE has internal conferences, countless internal meetings, etc. The startup community collectively is the functional equivalent of a Fortune 100 company, and like any such large organization, there have to be methods for communicating internally. (This is a subject I hope to write about in the future.

Is Capital on Stage a scaleable startup which a VC would consider funding? If so, how do you scale it? It’s worth noting the 24th wealthiest person in the world, Sheldon Adelson, made the core of his fortune from selling a conference business. (In 1995, Adelson and his partners sold the Interface Group Show Division, including the COMDEX shows, to SoftBank Corporation for $862 million.)

A: We’re definitely scaling up. Next year we’re going to Brazil, so we’ll have 5 annual conferences on 4 continents. We won’t be adding more main conferences after that, instead we’ll let our fans do the scaling: December this year we’ll introduce “Capital on Stage Sessions”, which are a franchised version of the existing Capital on Stage global conferences (cf. TEDx). We get so many requests from excited past attendees to introduce our unconventional conference in their city, we are listening to them and the first Sessions are scheduled in Paris, Amsterdam, Tel Aviv, Istanbul, and Sofia. Very scalable indeed, but we stay a closed community that grows mostly via word of mouth – with or without external funding.




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