This year StageXchange has had the privilege of being invited to become the host platform for what are arguably some of the most important Match VC and accelerator events in the Western Hemisphere. We were a SXSW partner for their Startup Marketplace and Student Startup Madness competition, hosted the Patriot Bootcamp on our platform, and will once again be the deal platform used by Endeavor Mexico for their Match.VC event in Mexico City this summer. In the past we have blogged about why accelerator events have had diminishing returns for startups and entrepreneurs the last few years, however, today we would like to discuss what these events can do to make them more successful for all parties involved. Having been to many competitions in the past as a judge or even applicant, as well as, being the host to accelerators I believe there is ample data from success stories, feedback, and even failures to derive some valuable suggestions—and solutions—for those organizing accelerator and match events.
Accelerator events have increased in numbers and in applicants, creating a paradox of sorts. Event organizers can make a lot of money from applicants and sponsors, but those who ought to derive meaning and value—the startups and investors—tend to leave empty-handed. In short, there are far too many applicants for VCs to reasonably review during an event and the software platform (not to be named) being used by many of the accelerators does not provide a deep dive with its preview. The goal for most of these events is to collect enough data on competitors to deliver an advertisement for their opportunity. Pitches and marketing materials, however, are only a tiny part of the equation for an investor. VCs want supporting documentation, independent validation, and the ability to ask questions and receive timely responses. Instead they are treated to an exciting pitch event, given brand exposure, but usually leave without having been matched with deals and opportunities that are a good fit for their investment objectives and funds.
In short, investors simply do not have enough information to pull the trigger on a deal.
These events have become a competition with a monetary prize instead of the type of partnership and investor relationship that will create success for all parties. There are prizes awarded for various things, but little investment. So how can this be rectified?
First, investors need to be given the right information, supporting documentation, and a way to validate the assumptions prior to the event. While that is infinitely less exciting and fun than listening to pitches and watching the crowds go wild, it is also more rewarding and respectful of their time. Endeavor Mexico’s match events provide investors with more than just a standard overview of the companies and opportunities; they provide VCs with access to all the information they would need to close on an opportunity weeks before the event. This enables VCs to set their own meeting schedules with those entrepreneurs and developers that meet their criteria and make the most efficient use of their time.
Second, startups are usually driven by innovators, not necessarily financial experts and therefore do not always understand the breadth of information needed by investors to make a decision. It is incredibly beneficial to the success of a startup to have guidance on what investors are looking for and templates that help them organize their information into a successful narrative. Not to toot our own horn but—eh, what they heck, let me toot it…StageXchange provides templates, helpful videos, best practices, and other guidance mechanisms that make it a no brainer putting together a top shelf deal pitch. Entrepreneurs don’t have to struggle putting together a strong dealbook, we made it easy.
Lastly, no deal will be made without independent validation of assumptions. De-risking an opportunity for the VC using 3rd party data and tools prior to the event cuts the effort on their part and helps them to feel good about pulling a trigger at an accelerator or match event. We knew that any deal platform we could create would absolutely need to include independent validation mechanisms. Our goal is to help facilitate deals and that means lowering investor risk.
Obviously, we believe our platform would improve the results of match VC and accelerator events, but if an organizer chooses not to utilize a platform with these features built in they could at the very least try to address the points in their organizational efforts. Our goal with this platform was to create a hosting environment that creates transparency and empowers due diligence and we believe we have accomplished that.