This blog post appeared as a guest post on the etouches blog
Surprisingly often, event organizers consider their sponsors as cash cows instead of what they actually are: partners who contribute to the success of their events. I am very active both in the startup scene as well as in the world of events and sponsorship, and I cannot help but see a lot of parallels between a startup seeking investors and an organizer reaching out to sponsors. The interesting question is: what can organizers learn from a startup/investor relationship? Quite a lot, I feel.
The quest for money
Both startups and organizers are often notoriously short on money and spend a considerable amount of time reaching out to investors and sponsors. The process of reaching out to investors is quite straightforward when it comes to startups: investors expect a pitch-deck and an executive summary which please should match certain standards. If you are in a startup you will spend a lot of time, optimizing your pitch-deck. You will consult many of the uncounted resources on the internet that will help you more or less well to put together a perfect pitch-deck that you believe will convince investors. And you will inevitably end up on Guy Kawasaki’s garage.com who is kind of an investor legend and provides de-facto industry standard guidelines for investor-seeking startups.
My advice: inspire yourself on what is required for a startup and try to adopt a startup-mentality for your event.
Landing an investment
Oh boy, how many pitches have I delivered in my life? How often have I been grilled by investors with nagging (and justified) questions? What have I learned from that? Preparation matters. Trying to convince an investor without being super well prepared is DOOMED TO FAIL! Investors will hands-up pinpoint the flaws in your concept, execution and your documentation. It is merciless. Luckily it’s not that difficult anymore to find inspiration and best-practice examples on the internet. Just navigate to YouTube and search for “startup pitches”… you will find a plethora of interesting pitches. And you better watch some of them as they will give you a lot of inspiration on how to pitch your own event. Yes, correct: you also have to pitch. I often assist in conf-calls between our portfolio organizers and potential sponsors and yet I’m often surprised how many organizers are entering the stage being poorly prepared, sometimes up to a level that I have to take the lead in the negotiations.
My advice: prepare for your pitch, rehearse, have your numbers ready, anticipate nagging questions.
The investor is a partner
Startups learn sooner or later that an investor is not only putting money in the company. Instead, a good investor invests so-called smart money. This means that he has a network, knowledge and other assets beyond the monetary value of his investment the startup will benefit from. Those startups who neglect this wisdom may go for a while, but often enough they stumble over their own feet. Investors are partners and therefore they should be treated accordingly: with all due respect and an obligation to report to them on a regular basis. And they should contribute to the success of the company by getting involved to a certain degree.
It should not be forgotten, that investors have a large network of companies they are working with and that they are more than interested in leveraging their portfolio by connecting their companies. This can perfectly apply as well for sponsors whom I call “smart-sponsors”.
My advice: learn as much you can about your sponsor, about his connections and assets and try right from the beginning to include him as a partner who brings added value beyond his money
Investors expect reports
No investor will put money into a company without expecting detailed reports on traction, financials and other important metrics. This reporting obligation has to be fulfilled by the startup, otherwise, it will be sooner or later in big trouble. The reason is obvious: investors (especially true for institutional investors – VC’s) have their own obligations to report what they have been given to them to invest. They are held liable for what they did and therefore need to justify that the money has been invested carefully. The bigger the investment becomes, the more detailed are the reporting requirements. A business angel might be satisfied with simple briefings, whereas a VC who pumped a Series A or more in a company, will require detailed reports about every single aspect of the company.
Sponsors are no different: they invest money in your event, money provided by their company through a dedicated budget. And the sponsorship responsible has to defend his decision towards his superiors. Smaller companies might be easier going (just as business angels), but bigger corporations will hold you accountable for what you have been doing with their money.
My advice: be prepared to deliver clear and precise reports to your sponsors. The best would be to track the various activities right from the beginning and to make sure, that everything which is related to the sponsor is well documented.
Manage your time
Organizers are no different from startups: there are plenty of things to do at the same time. Fund-raising is not contributing in any way to the productivity of the organizer/startup. Yet it’s crucial for the success of the project. Startups are almost constantly fund-raising – to a degree that it simply becomes a habit. This means as well to build up long-lasting relationships with potential investors, nurturing these connections, updating their profiles on LinkedIn, etc … it’s not a short distance run, it’s a marathon. Those are the winners who are able to streamline their outreach, who are able to wisely use existing software and tools like todo-lists, CRM’s and other, sometimes even free of charge solutions.
My advice: get organized before you start reaching out to sponsors. You won’t have the time anymore to learn how to use a CRM when hell breaks loose and mayhem takes over.