Eight Tips For a Successful Demo to Investors

As accelerator and incubator demo days come into full swing, many startups are preparing to experience a right of passage: the on-stage demo. Companies hack some tech together, face the fear of public speaking and hope to get out of it in one piece. Some companies blow it out of the water, leading to increased momentum (ie. Pied Piper @ TechCrunch Disrupt showcasing its middle-out compression). Others are absolute disasters and miss the best opportunity to attract customer or investor interest.

If the purpose of the on-stage demo is to attract initial attention to a company, then the private demo to investors is to show that the team is executing, the technology is de-risked and a MVP product will be available in the immediate future. Successful execution of the private demo is critical for the company’s future success.

Personally, I’ve been on both sides of the private-demo table. When I worked for a startup, I always bore the responsibility of demoing to investors. And somehow the unexpected always happened: the projector didn’t work, an email reminder came in, or a bug showed up. Before long, my team began to joke that I was a demo-killer! And when I became an investor, demos became a great way to learn more about a startup’s progress, interact with the founders and ask the hard questions. Overall, the demo became an important data point to help drive my final investment decision.

In order to help founders prepare and execute successful demos, my colleague, Mike Bai, and I have come up with eight quick tips:

Before

• Tip 1: Understand what the goal is

A good way to approach the demo is to think about it from the investor perspective. Investors do want to see a working demo with as many features as possible — in order to better gauge the technology risk. However, this is not the most critical since most investors will make a bet on the team’s background to gauge their ability to build the technology. What is more central for the investor is to understand why this demo will lead to a future product that will create and/or disrupt a market. Therefore, an entrepreneur’s goal should be to effectively communicate the future vision and why this demo is an important first step. The goal of a demo is always to create a compelling picture in the investor’s mind on what they are investing in.

• Tip 2: Prepare a hard-copy of your step-by-step demo roadmap

Often times there is a communication divide during investor demos. Investors might be focused on questions they might have or trying to mentally compare your product to that of your competitor or another product they have seen before. Alternatively, they might not understand the technology, your terminology and/or miss what is and isn’t important. To keep your audience engaged, it is important to communicate clearly. And thus, we believe that pre-preparing a demo-roadmap in hard copy is an ideal tool.

While not high tech, a piece of paper with a list of different scenarios specifying clear input and output can help frame the demo expectations and results as well as having a clear emphasis on why certain things are important. In order to write a roadmap, the demo-er has to be disciplined in understand what he/she will show and prepare accordingly. By having a clear roadmap, even when things are chaotic, there is always something clear that investors can follow.

• Tip 3: Have a backup plan

Code, wifi and projectors always fail when you need them the most. And investors hate waiting for 5 minutes for the CPU to reboot or the program to be debugged. Therefore having a clear backup plan for potential issues is critical for a successful demo. While it might take some time to do, pre-preparing a video of the technology working is a good idea. Even if you can’t show it live, investors will be able to see the demo working as intended. Remember the most important thing is drawing a future for investors. Any solution that leads to that end goal will work.

• Tip 4: Practice and Preparation are key

A successful demo is not achieved from out of the blue. Instead, they are continuously refined through dedicated preparation and practice. For example, Steve Jobs is said to have had a meticulous work-ethic in preparing for a product launch of demo. Another example is a recent demo by Point One Navigation, a Hemi Ventures portfolio company. While preparing for an April 2017 self-driving vehicle race in Thunderhill Raceway Park, Aaron, the CEO, and his team spent a full day before the event, mapping the race track and debugging any issues. This preparation paid off when Point One won the event the following day.

During

• Tip 5: Be Clear and Concise

Now that you are adequately prepared before the demo, its time to focus on how to communicate. It is important to setup each part of the demo by first describing what you are showing before you actually show it. Then show the actual demo. After the demo finishes, make sure to include why this is important. Then begin setting up the next part of the demo. Ideally, this will be structured in the same way as your demo-roadmap.

If the investors are new to your technology or industry, make sure to include a brief introduction to the technology. Also make sure to write down feedback and questions from the investors so that you can make improvements for next time.

• Tip 6: Make sure to compare your product to industry standards/competitors and explain why your product is better

Investors are always looking for differentiation between competitive products. Therefore directly addressing the uniqueness of your product/technology when compared to competitors shows that you have a clear understanding of the market and you are confident in your product.

• Tip 7: Short and Sweet

A good demo does not go over every small detail of the product/technology. And given time constraints when meeting with investors, it should be kept to under 5–10minutes. Focus on the most important features and differentiated aspects of your solution and

After

• Tip 8: Immediate Follow-up email

A seasoned demo-er follows up with an immediate thank you letter that includes the video (the one you previously made as a backup) and a copy of the demo-roadmap. This helps investors remember the demo and go over things that they might have missed/weren’t clear. Also its important to ask for feedback on what you can do better to show you learn fast. That’s how a startup can evolve.

These eight tips are only a brief summary of what our Hemi team has learned through the years as startup operators and early stage investors. While experienced investors will not be bothered by a bad demo, a great demo will show investors that the company’s vision is clear and you have already begun to execute on that vision. Therefore make sure to invest the necessary time to prepare properly. Understand what you want to demo and why you want to demo it. Develop a demo-roadmap and ideally, a video backup. Remember, a demo’s success is usually determined before stepping into the room.

Amy Gu | Managing Partner @ Hemi Ventures

Amy is a technology enthusiast, entrepreneur, and philanthropist at heart. She stays deeply involved with founders and companies. She has been touted by many founders as the most helpful among all their investors. Being an entrepreneur for the past decade, Amy has helped visionary startups like Evernote and Udacity to the next stage of growth. Amy was voted Fast Company’s Most Creative People 2015.