Take the idea of your standard startup pitching competition, flip it on its head and you get Capital on Stage. The founders of the one-day conference are sick of the usual startup events where entrepreneurs are forced to battle it out amongst each other to get a hint of recognition from VCs. They think it’s about time that VCs compete to persuade great startups to come to them.
And that’s exactly what happened at yesterday’s Capital on Stage Berlin. The event brought together the biggest names of European and German VCs, each making five-minute pitches and hosting open office hours to hear from a select group of founders.
It’s the fourth event organisers Arjen Strijker and Till Ohrmann have hosted since launching in 2011, each aiming to “demystify” the VC process for founders and provide founders with the opportunity to figure out which VC is best suited to their startup. The conference has a ratio of 10-1 founders to investors and has so far taken place in New York, London, Berlin and Amsterdam – with Singapore next on the list and a global aim for 2014.
A selected startup community
Startups apply for an invite, though there are strict conditions – only one founder from each startup can attend, and the startup must be a scaleable web or tech venture and at a stage where they’re ready for VC investment. Attendance is limited to up to 200 founders, with about 50 per cent of startups that apply being rejected.
“This filtering process ensures that our events attract only high-calibre startups that are really worth VCs meeting – at a lot of startup events you see people who have just begun and don’t really have an idea yet. We want to prevent this,” Strijker told us. “In Berlin, we had to reject a lot, not just founders, but also VCs and angels.”
Investors sweating it out
For the audience, it was rather fun to see VCs put into the awkward position of having pitch startup-style – some investors definitely showed their nerves. There were a few stand-out pitches though, including Nenad Marovac of DN Capital, Uwe Horstmann from Project A Ventures and Michiel Kotting of Accel Partners – who jokingly told the audience that he didn’t land his job at Accel by wowing HR with his financial talents, but rather lost the VC a lot of money when his Accel-funded startup failed and joined the team to repay his large debt.
It’s a new experience for a lot of investors, as Christian Thaler-Wolski, Principal at Wellington Partners, put it, “It’s great because it really gets VCs out of their shells. The event also opens up the black box of VC and gives founders a better understanding of what each VC is looking for.”
The rules when approaching VCs
Along with the opportunity to network with a roomful of investors, founders also got more general tips on how to best gain funding – approaching VCs at random to practice pitching is a definite no-no as VCs don’t like entrepreneurs approaching multiple investors with ideas.
Founders were also told to avoid funds that are nearing their end to avoid being pressured to sell their company too early. Some of the problems that VCs have were also acknowledged – one investor said “we need to learn to say no”, rather than stringing entrepreneurs along with the false hope that they will get funding.
And while yesterday’s event was not as dramatic, there have been some grand gestures at past Capital on Stage conferences: In New York, an investor signed a check for one startup he’d met that day on the spot while he was pitching, Strijker (pictured above) told us. The investors at the Berlin conference remained tight-lipped on whether they’d met a potential addition to their portfolio – we’ll keep our ears open for any funding announcements post-conference.
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