What Makes New York's Digital Investors Tick? The Digital Mission to New York Found Out.

Digital Mission NYC '09 - Investor's RoundtableA short pause for breath in the Digital Mission activities provides an opportunity to blog about the investor breakfast yesterday morning. It was organised in conjunction with The Hatchery and UKTI at the very digital Roger Smith Hotel - more on that in a moment.

The companies and investors mingled over breakfast, then both groups gave a short introduction before we dived into a roundtable Q & A session. I was struck by how frank the investors were. I've been dealing with VCs for more than a decade, and it was one of the most open exchanges I've seen, and with a broad range of investor types too. There were lots of sound bites and snippets, I'll share a few...

  • Investors want prudent operators - the words 'risk management' came up multiple times.
  • They want business leaders who are accountable - VCs themselves are intermediaries between their own investors and companies they invest in. They have to give an account of what goes on too.
  • Most US investors want a business that will be a leader in their space, but make sure you choose a meaningful space. To be the leader in the digital marketing world in 3 years is over reaching, but saying that you will be the leading provider of payment solutions to east coast businesses is more meaningful. Not every investment will be the next Google, nor does it have to be.
  • Investors will want involvement in the business - although some will be much more hands on that others. Understand their style. Will it work for you?
  • Generally they will want to meet any key business hires - They may help with suggestions for candidates, but if you are using your investors as recruitment consultants, you're doing it wrong!
  • Distance is (still) an issue - for a UK business that means having a management team in the US, a VC with a UK presence, or investors that are happy to work across timezones.

Mark, of Ipadio, makes some interesting observations in his phonecast after the meeting:

Investors generally buy into a management team, rather than an idea, so they will want to know you and know how you will interact well with them. It just so happens that there is a related post on TechCrunch - The Eight Best Questions We Got While Raising Venture Capital - which you might want to cast your eyes over too.

One last thing, something learnt via a painful lesson early in my career and a point well made during the morning: Keep all of your investors in the loop, all of the time. Which leads to one of two stand-out quotes of the morning, for me at least:

"Investors love good news, they can handle bad news, but they hate surprises."

With the Q & A over, the room broke into some more informal networking, with lots of conversations around the (rather nice) room. As the hotel was mentioned in the key note at Web 2.0 Expo the day before, I was keen to find out more about them. It just so happened that James Knowles, CEO and artist-in-residence (yes, you did read that right), dropped in to meet the companies. That lead to some interesting discussions on entrepreneurship, leadership and marketing. As you can probably guess from his title, it isn't a conventional hotel business! Which leads me to that second quote, this time from James:

"20 conversations a day is better than 1 weekly meeting."

We're back there today for lunch...


Thank you very much for the

Thank you very much for the excellent and useful subject.