Building Strong Relationships/Networks

On July 11th, Frontier Incubators hosted their fourth event in a series of webinars, which aim to connect leaders from global accelerator and incubator programs with program managers who are seeking to serve entrepreneurs in the Asia-Pacific. This webinar provided insights into the important role of relationships with investors, and how trust, established criteria, and meaningful connection are essential for the success of these associations and networks.

Read on below for key strategies and approaches to understanding incubator and accelerator impact from Akina Foundation, Invest2Innovate, Conveners.org, Mentor Capital Network, SecondMuse, Village Capital, and YGAP.

Incubators

18.07.2018

Five Key Strategies and Insights For Building Strong Relationships

1. Establishing Strong Relationships in Nascent Ecosystems

The session opened with an introduction from each expert team explaining why strong relationships are important for both the accelerator organisations, and the ventures who come through the program. Heather Matranga from Village Capital highlighted the importance of seeking out local contacts when working in new markets, and outlined the need to respect the time of potential partners. She emphasised, “people won’t remember what you say but they will remember how you make them feel.” Heather also describe the importance of investors, and the need to “tap the local network” in order to build mutually beneficial relationships.

In nascent ecosystems, Kalsoom Lakhani from Invest2Innovate described how the opportunity for accelerators to create a value system through establishing “what you look for in your mentors, and make sure those mentors measure up to that.” Kalsoom also described that “there is a definite lack of trust in these markets. It is difficult for investors — even if they attend the demo day — it’s important to think about how you build trust over time so that they do not meet the startups for the first time on the demo day.”

In order to build relationships, Invest2Innovate encourages the creation of “multiple touchpoints”, and facilitating Mock Board Meetings for match making purposes. A Mock Board Meeting is a facilitation method that supports building relationships between investors and entrepreneurs, provide advice and support to the entrepreneurs, and give a platform for entrepreneurs to give feedback to one another on the presentation of their company. Please see the end of this post for a “how to” guide for running a Mock Board Meeting.

2. Establishing Strong Relationships in Crowded Contexts

Chris O’Neill and Guy Redding from Akina Foundation raised the importance of understanding the community you are working in, particularly in closely networked contexts. For Akina in New Zealand, an informal approach to impact investor networks has generated a knowledge sharing space which is appropriate for local needs.

Ian Fisk of Mentor Capital Network also described the value of seeking out investors and mentors who are “not the usual suspects.” In moving beyond the big names, the potential for meaningful engagement can be increased. Ian offered that in working with different partners who are committed to the process, “that leads to a deeper relationship.”

3. Working With New Investors

When working with investors that aren’t prior investors themselves, Chris outlined the necessity of helping them to “understand the approach and the mechanism” — particularly in relation to expectations around impact.

Kalsoom highlighted the challenges relating to investor awareness of start-up investing, “it’s not an issue of liquidity, it’s an issue of unsophisticated capital. We have folks who are coming from family conglomerate companies and I’d like to say it’s a matter of investor education but they frequently think that they know best.” As a result, Invest2Innovate created a toolkit to assist startups to negotiate with investors, and create more accountability.

4. Maintaining Trust and Customer Relationships

In the context of staff turnover, Manita Ray of YGAP discussed the importance of sustaining strong relationships with the organisation, beyond individual connections. Mainta explained that when YGAP experienced high-level staffing transitions “documentation between partners and investors was an issue.” YGAP use Pipedrive CRM (Customer Relationship Management), and have reached a point where “the donors and investors have come on because of the person, but they stay because of the work that we do.” Heather from Village Capital shared that having a clear brand is critical to this process, so that the organisation has an identity beyond the specific staff who are reaching out to investors, mentors, and advisors.

Other CRM software resources the partners recommended include:

Salesforce Pro

Pipedrive

Hubspot

Airtable

Capsule

Keela

5. Sharing Criteria and Investor Pipeline

Ian outlined the importance of fostering relationships with both investors and mentors, as “many of our entrepreneurs become mentors over time.” Encouraging connections can be beneficial for everyone, as ‘“founders like to talk to other founders.” Ian described the strategy of connecting people who are aligned in the problems they are addressing, but are not direct competitors in the same market. He described the pipeline strategy as working successfully through “light touch events” where “personal and virtual” connections are facilitated during the selection process. As mentioned in our previous blog, rolling application processes can assist to encourage these ongoing and relevant relationships.

Manita also discussed the importance of developing connections early in the relationship, “when possible we try to connect the investor to an entrepreneur by taking them to field to get to see the company in action.” YGAP has started “growth hacks” which involve “taking investors with a real focus on the impact side and want to meet and work with the entrepreneurs” where investors meet with “10–15 of our entrepreneurs, advising them outside of any obligation to fund them.”

How to run a Mock Board Room

Time Required: 3.5–4hours

Materials Required: Name tags, 1 pagers on companies, note cards, pens, timer

Space Required: Room with smaller tables with seating for 5–6 people per table.

Facilitation Framework:

The Mock Board Room is an opportunity for entrepreneurs to get advice and support from a wide range of investors and mentors in a format that is more in-depth than a traditional demo day. There are a few ways to use this format, so please feel free to adapt this to fit your program.

Cohort companies are paired with each other so that they can listen to their partner provide their pitch and give feedback. You want to have 3–4 mentors and investors for each pair of cohort companies to participate.

The general format is as follows:

Mentors and investors are instructed to NOT provide their names, backgrounds, or organisational affiliations until the end of the conversation. This is done so that the entrepreneur and mentors have a chance to share their business plan and be more candid about the challenges they are facing.

One of the entrepreneurs has 5 minutes to share the overview of the company and end with a challenge they are facing (that is NOT raising money) with the mentors and their peer. The mentors (and peer company) then have 30 minutes to work with the entrepreneur sharing their feedback, asking questions, and providing their best thinking on how to overcome the challenge. After the 30 minutes are up, the group then has 5 minutes to introduce themselves, share their backgrounds, and exchange business cards.

There is a 10 minute break while the entrepreneurs rotate to a new group of mentors.

Once at the second table of mentors, the entrepreneur who did not present in the first round has a chance to go through the process. They share their company and challenge for 5 minutes, then get 30 minutes of support and end with 5 minutes of sharing backgrounds and introductions.

Each round with break should take about 50 minutes.

Ideally you plan for 4 total rounds so that each entrepreneur gets to present twice, and in allowing for a small time buffer, this ends up taking 3.5 hours.

It is very helpful to end with a happy hour or meal following this process to give the entrepreneurs and mentors an opportunity to follow up with each other and dive into additional conversations.

We hope the webinar series has sparked your interest in Frontier Incubators program.