What there is in for me:
- Why Demodays aren’t working anymore?
- How Wayra Brazil improved its Demoday format and achieved great results
- What others startupa accelerators are doing?
In 2014, our team at Wayra Brazil was struggling with the limited results in our last Demoday. Wayra Brazil, as most startup accelerator, had at the end of its acceleration period an event to present its accelerated startups to investors and the market.
To contextualize, in Brazil, we were having a boom of startup accelerators, leading to a boom also in Demodays. Most of them were quite similar, a big event where startups pitched 5-10 minutes to an audience of around 100 people composed of venture capitalists, angels investors, press, partners (lawyers, accountant…), other accelerators, and other startups. After the pitch session, there was some moment to socialize, especially for the entrepreneurs to talk with the investors, while having food and drinks.
It was a big event, therefore was not only expensive but also a burden to organize it.
Our team decided to analyze the problems and propose improvements to this “traditional” format. As we always ask our startups to talk to their potential clients to understand their problems and perspective, we started by talking with our clients: Wayra’s startups, angel investors, and venture capitalist.
Talking with entrepreneurs, we understood better many of the challenges they faced and also asked for ways to improve. The main problems were:
– They had a lot of pressure to do the perfect pitch in 5-10 minutes in front of a big audience;
– They didn’t want to open all their numbers since there were non-investor people, press, and might even have competitors;
– They also had trouble to talk with the investors after the pitch session since the event was crowded, and investors were always stopped by someone;
Talking with the investors, we discovered more problems.
- The partners in the VC funds didn’t want to participate in Demodays anymore because they couldn’t talk with the entrepreneurs, and startups didn’t present the important numbers. So they sent their analysts which didn’t have the same view and decision power;
- Investors agenda, especially partners, are really complicated with many travels out of the town;
- Investors started to see the Demodays as a networking event, instead of a significant deal flow event;
In summary, Demodays were starting to become more of a party than a fundraising event, which, of course, wasn’t what we wanted.
Working with those problems and the ideas investors and entrepreneurs told us, we began to brainstorm how we could improve the Demoday and achieve our goal of increasing the number and the volume of investment in our startups.
After a couple of days discussing, we decided to not only change some things of the Demoday, instead to restructure it. We decided to focus on improving the connection between the entrepreneurs and the investors. That is when we came up with the concept of the Demoweek. Here follow the main changes:
- The event would be only to investors (angels investors and venture capitalist). If you’re not an investor, sorry but you’re not invited;
- Instead of a big event for many people, we decided to make it more like a business meeting. The entrepreneurs would have 20 minutes with an audience of no more than 15 investors, who could ask any question at any time;
- The Demoweek would be (surprise) a week long, giving more schedule options to the partners of the funds to participate. The investors would be divided into small groups to interact better with the entrepreneurs;
- Each day 8 startups would pitch during the morning organized by the amount they were raising. So we had different days for angel investors, seed investors, Series A, and Series B, making it more straightforward for the investors;
- Each day after the pitch session, we would offer lunch to the investors and entrepreneurs, giving more opportunity for interaction between the investors and the entrepreneurs;
- Not all graduating startups were presenting, only startups that were performing and that were raising capital presenting. Also, they could be from any previous batch;
With all those changes, we had incredible results in our first Demoweek. The entrepreneurs and the investors loved the new format. More important; we increased the number of investments in our startups.
We achieved all this while lowering the cost and burden to organize the event. After our first experience, it was settle, our Demoday from that day on, would not be a Demoday, but a Demoweek.
We’re not the only ones to realize the problems of the Demodays, some of other Wayras were trying different formats to improve the outcome.
I know other formats from different accelerators that doing interesting things to solve those problems
One of those accelerators is Techstars Chicago, which has two separate Demodays. The first one happens in the morning only for important investors, where they put all the startups to pitch at the same time to different investors, one at a time, and then the startups rotate to pitch to another investor. The second is in the afternoon and is a bigger event open to the other parties in the community, more similar to the “traditional” Demoday.
The Demodays as we know are with their days counted; new formats will appear to solve the problems listed above and also to adapt to local ecosystems.
I would love to hear your experience with Demoday. How did you think they could be improved? Which other formats did you see and enjoyed?
- The Demoday format has many problems that some accelerators are trying to solve
- Dare to think outside of the box, don’t be stuck with a traditional format if it’s not working for you
- There isn’t a one size fits all for the Demodays,
- Always get your customer perspective of a problem before coming up with a solution