Startable – Healy Jones’ & Prasad Thammineni’s Blog

Julien Wallen had an interesting comment on my recent blog post on new year’s resolutions – in particular my resolution to attend more technology conferences in 2009. He quite astutely questioned if technology conferences had a positive ROI, “But I’m somewhat cautious about conferences. My experience is that either you need to prepare really really well to make best use of the time or the ROI is really questionable – that is with a startup budget not a VC one ” So, I’d like to see if I can get a discussion going around this, and thought I’d offer up a venture capitalist’s opinion on technology conferences so that entrepreneurs could get a bit of a feel for if and how technology conferences might fit into their venture financing strategy. (read Julien’s blog post response on the ROI of tech conferences here)

Are technology conferences worth the cost?

Is there a positive ROI for a VC to attend a technology conference? 

Of course the answer is that It Depends!

Wow, what a cop-out answer!

As a venture capitalist, I attend conferences for one of three reasons (I reserve the right to increase the number of reasons if more become apparent.)

1. Meet new startups – conferences can be a very good place to meet new startups and find new potential investments.
2. Fill in an investment thesis – industry specific conferences can be great places for a venture capitalist to refine an investment thesis and learn more about the competitive landscape in an industry, get a feel for customer needs, the next generation of technology, best practices, etc.
3. Support an existing portfolio company – a good venture capitalist makes introductions that help portfolio companies succeed. Conferences can be great places for a VC to facilitate in person meeting between portfolio company executives and critical players in that company’s ecosystem. (In my short, not particularly illustrious career as a VC one of my shining moments was at a conference where I introduced a portfolio company CEO to several players, one of whom ended up becoming a large customer of the company and another of whom is now a serious channel partner for the business. The CEO compensated me with a cookie at a board meeting – a very tasty cookie.)

How does a venture capitalist make the conference worth the cost?

Preparation! In a prefect world, my conference schedule would be almost as scheduled as a day in the office, with back to back meetings with entrepreneurs and key players. Of course, one of the advantages of a conference is the ability to “wander” around and “bump into” people/companies that have been difficult for me to reach – and having a game plan in advance on who and which people/startups I want to “randomly” meet is pretty critical.

As an entrepreneur, how should technology conferences fit into my venture financing strategy?

As an entrepreneur I would not attend most technology conferences with the sole goal of meeting venture capitalists. While it makes sense to schedule meetings with VCs if you are going to be at a conference, going to most conferences with the express purpose of actually meeting new venture capitalists is not a good move.

That being said, several conferences have special sessions designed for entrepreneurs and venture capitalists to mingle. Sometimes these are specifically part of the conference, and other times these are organized by groups not directly affiliated with the conference. I’d do a pretty detailed google search on this and see what you can come up with. (for example, this was a good event from last year’s Web 2.0 Expo.)

Technology conferences can also be an easy way to get a face to face meeting with a venture capitalist. I’ve positively responded to a number of “hey let’s get a coffee if you are going to be at the XYZ conference.” Since these are usually less formal (and shorter/easier for the VC to leave quickly – being honest, sorry…) than a typical pitch to a VC I think the barrier to getting such a meeting is much lower. If you are looking for funding and are going to be at a conference I’d recommend pinging venture capitalists that you know and offering to get a coffee or drink with them. 

If a venture capitalist is currently doing diligence on your startup, suggesting a meeting plus arranging for the VC (or making introductions) to potential customers or other critical partners/players in your ecosystem during an industry conference is a great move. The VC will get the chance to learn a ton about what you are doing through other players in the space, plus you will get to show off your understanding, connections and general clout in the industry you are attacking. And, depending on how comfortable you are with your lead in the industry (and how big your cojones are) you can even list out competitors attending the conference and suggest the VC swing by their booths so they can see for themselves how much better your company is.

Ok, I’ve clearly beaten this subject to death. I’d love to hear your opinions, as I’m sure I’ve left things out and probably missed the point entirely. Would also love to hear stories of meetings at conferences!