You're listening to Trade Show Live On the Road, featuring conversations with the people who bring trade shows to life, including attendees, exhibitors, sponsors and trade show industry thought leaders. We attend trade shows around the country in a wide variety of industries from healthcare to consumer products and everything in between. The podcast is a production of the Trade Show Manager, a trade show consulting firm. And now let's go on the road with Trade Show Live.

Janet (00:28):

We're at CES 2020 looking ahead to another exciting decade of innovation and consumer electronics development. However, you can't do it without money. So with me right now is the founder of Angel Launch, Zahava Stroud. Zahava welcome to Trade Show Live at CES 2020.

Zahava (00:50):

Thank you so much. I'm glad to be here.

Janet (00:52):

Now we're on the first day of the show for us, which is Tuesday. However, Zahava you've been busy; you've already done a number of things at CES. So tell me a little bit about Angel Launch and what you were up to yesterday.

Zahava (01:06):

Sure. So our website is angellaunch - l a u n c h - .com and we are a leading producer of investment forums, summits and networking events in Silicon Valley. We produce events almost every week connecting startups to investors from around the world. They consist of networking receptions, hitch nights, demo showcases, venture forums, and one of our most popular ones is called backyard capital, where we do a monthly reception in a private home in a very elite area of Silicon Valley where we get 150 startups and investors for informal networking. The goal of these events has been to connect investors to promising startups through deal-making and many startups from around the world have received millions in funding. Yesterday we produced an annual conference at CES; we do every year for over 10 years, called Silicon Valley Funding Summit. And it's a one day conference where we bring in startups from around the world. We bring in investors ranging from millions to a hundred million in funds looking for promising startups. We do a full day of networking, pitching and a demo showcase was very successful. The startups met a lot of great investors and in fact serves told me that they now have been funded from our past events, which is very exciting.

Janet (02:26):

Oh, we love hearing about people getting money. Now she may sound like it's got a singular focus, consumer electronics, but really we've got everything here from the health tech to virtual reality to toys and games and all kinds of silly stuff to very, very serious things. I'm curious as a Angel Launch person putting together people who have ideas with people who can fund them, are you agnostic to, you don't really care what kind of business it is or are you in any particular area?

Zahava (03:01):

So the great thing is that what we do is we produce live events. We don't actually invest. We connect startups to accredited investors and we cover all markets. In the last two months we get a FinTech event. We did quite a few on health tech, life science and medical devices, automotive and connected cars, enterprise and consumer applications, AI, deep tech, machine learning. We cover all markets. And what we found is that there's such a huge community of people traveling to the Bay area who don't live there, that we can do events almost every week and we can get several hundred people, those startups and investors who attend, but at least 40% don't live in the Bay area. They're just traveling through for meetings or deals, so we're a great resource for them to meet other people.

Janet (03:49):

Tell me about the investing or the vetting of the investors. Do you require that ultimately they invest in something? How do you prove that they have the money they say they have to fund people?

Zahava (04:03):

so we don't do rigorous due diligence since we're an event producer. What we do is we ask investors and we rely on their self representation that they are accredited investors. If we don't know, then we ask them for some types of documentation such as websites, LinkedIn profile, angel list profile, or people that we know and then we rely on their representation. And so far we haven't had any issues with that because again, the events are free or low cost. And the whole point is to connect people to investors. Many of the investors also are syndicated, which is very common. Maybe they'll get 10 or 20 investors who invest a small amount in a deal. So we often find that angels come to our events, refer their friends to startups. In fact, I just met a startup that pitched at an event a year ago and then recently met an investor who was at a different event, but one of the investors he met knew of the startup and said they'd be great for you, connected them. And now he's a board of advisor and investor in this startup because they had all attended two different events in the Bay area. Networking is the number one place that startups make deals. So that's why it's important to go to as many events as you can.

Janet (05:10):

I'm curious about the startups themselves. Do they just come into it cold and learn by the school of hard knocks, how to pitch? They've come to you with that experience or is this a great place for them to learn those skills?

Zahava (05:22):

So we don't do any training or there are many resources that do and we have many partners that offer training. For instance, at our backyard capital, which is held on a Thursday, we offer a free training by someone who's a mentor on Wednesday nights for anyone who's pitching to come and learn. So if someone asks me for training, we have many other resources in the Bay area where you can go and learn about how to pitch. But one reason people come is to see other people pitch. Because of course when you live in the Bay area and you're pitching all the time or going to events, you have a much higher level of presentation and you know what investors inspect. So we find it's very helpful for people who never pitched to get an idea of what they should be doing. We use that as a learning process.

Janet (06:04):

You know, when I think about pitching, I think about it being elevator pitch, you know, tell me 30 seconds. But generally, how long do people have to pitch their ideas at your events?

Zahava (06:13):

So before my current life, I was a trial attorney and I was used to being in court with the judges who had a very limited attention span. I was used to pitching, you know, a lawsuit. That's where millions of dollars I had two minutes. So I tell all my startups, pretend that you are pitching for your life and you have two to four minutes to convince someone that they should invest in you because you're actually pitching for millions of dollars. So most of our pitches are three to five minutes because they're in front of a stage. We tell startups you need to learn to have, to have an elevator pitch so that when people want to meet with you, then you can do the extensive dialogue in the PowerPoint slides and the more extensive presentation. But you should have a very charming, with a short pitch to get their initial attention.

Janet (06:57):

You know, sometimes technology can be, uh, kind of boring or a little over people's heads. And yet those could be the billion dollar ideas. Do you find that folks that are successfully landing funding that they really do bring a presence to the stage?

Zahava (07:14):

Well, I would say it's not necessarily true. When you see the extremely successful startups that have raised millions and millions of dollars and you see their founders speak, they are usually very smart, very charismatic, great at getting along with the people and you can understand why they got to their position. But I don't deal with that level of a startup like an Airbnb, right? I deal with early stage startups who are on the path to growth. So they may have not developed their full persona yet. And oftentimes it's not necessarily the personality of the founder, but the value of their startup that people care about, such as their customers, how much money they've raised, how much money they've made, how unique are they to the industry, who's on their management team, who are their partners? That type of stage. So we find those are some of the qualities that investors look for for the initial investment opportunity.

Janet (08:06):

So some of these investments may be, you know, early in the low five figures, it might not be a huge amount of money. Chances are what they're going to get out of it. Aside from the money, is the advice and the input from these potential investors?

Zahava (08:20):

Well, you know, the dirty secret of Silicon Valley is most investors don't have a home run, right? You hear about a few who do, but most of the ones I talk to privately, maybe had one home run in 10 or 20 years of investing millions of dollars. And even then it's often not huge enough for them to retire. So most investors do it, number one, because they're intellectually curious. They want to be helpful. They often can be a board or an advisor to the company and they believe in the product. So most of them aren't doing it just for the money. But of course they like a rate of return. So it's not unusual for an investor to maybe have 10 or 20 startups hoping that one of them will be successful, but at the same time they're going to give you advice to help you grow your startup venture.

Janet (09:03):

Now you mentioned that you're doing events almost weekly and probably as soon, sometimes more than once a week or or larger scale events, takes a lot of names and email addresses to make that happen. How have you gone about building this network?

Zahava (09:18):

So I've been doing this for over 15 years. Number one, it's relationship driven. I attend many events in trade shows, so I constantly meet people. I get cards from exhibitors at trade shows, people call me up, we use social media, all the normal forms of marketing. Well, number one, I would say it's word of mouth, which is not unusual for people to contact us because someone else got their email and referred them to us. Unfortunately people have a great experience, right? So they tell their friends, Hey, we went to this event, we had a great experience, we think you would as well. So people just join our mailing list. And again, if you go to our website, angel, launch.com you can join our mailing lists, get our contact information. We're based in Silicon Valley and learn more how you could attend, participate, or even host your own events.

Janet (10:04):

Okay. Now I'm trying to sit down and think how are you making a living if it's very low cost free to very small amount of money for attendees. Gee, how are you making a living?

Zahava (10:16):

The event industry is a very transparent industry and there's three ways we all make money. We either charge attendees, we charge sponsors, or we charge startups to pitch, and I use a variance of that model depending on the event. For instance, I had several free events recently where sponsors underwrote the event. They were either foreign entities that wanted to reach an audience or they were a group of startups that were looking to reach investors. So that's one way. Another way is we charge a fee for startups to pitch, which covers our costs for the event. And the third way is for some events we charge a low cost attending ticket.

Janet (10:50):

I've been a part of startup weekend before. Now this is where somebody literally wrote down an idea on the back of a card probably while people in front of him were pitching an idea and I've had to sit through 60 or more people doing a 62nd pitch and I was exhausted. Just listening to that at the end. Do you really cut it off at a certain amount? What's the magic number of people pitching?

Zahava (11:14):

It really depends on the event. I've done all types of events. Yesterday we had a full day of, I'm not sure, maybe about 40 startups pitching than I do evening events with 10 startups pitching. I would say it really, it's not so much a magic number of pitching. It's the quality of the pitches. If you have a good quality, the investors will sit and listen because the Bay area is very competitive. Investors all want to be in early on the best deal and the best deals go to the highest profile venture capital firms, so all the other investors are competing to get the attention of the good deals. That's why people who produce events like myself can't get investors to attend, is they're always looking for deal flow.

Janet (11:51):

Now I'm curious, are people sending you emails saying, "hey, Zahava, come on. Just hand me a good one. You know what's coming."

Zahava (11:59):

You know they don't do that. It's just not the way they do in Silicon Valley, but they attend events and that's why most of my events get 40 to 80 accredited investors, which is a lot if I'm doing them almost every week, but they know yesterday at my event, one of my investors said he'd been coming to my event for maybe 10 years that I've been doing it. He's from Michigan. He said, I come because I meet high quality startups continuously. It's fun. He said, I get to meet investors from around the world and I get to be exposed to a huge amount of startups the day before CES begins, so it's a great opportunity to kind of get a heads up on what's hot in the industry.

Janet (12:32):

I'm curious about Michigan or in this case, the North Carolina startup pavilion, but you're talking about predominantly doing events in Silicon Valley. Do you find that people from around the country come to Silicon Valley for this or is there a real need for your services in other locales around the country?

Zahava (12:53):

I would say that the reason I do them in Silicon Valley is because that's where the investors are. You could only produce successful venture forums if you have investors and the really the major cities in the U S are LA, New York, Silicon Valley and Boston. So I produce most of my events either during trade shows like this trade show at CES because you have investors in town or I did one at South by Southwest in partnership with the EU enriching the EU program. I've done them in other cities only as part of another trade show, but I do them mostly in the Bay area and I think you'll find most venture forms are done either LA or New York because that's where we have the highest concentration of technical investors.

Janet (13:34):

Even though there's only really three places where you can hold the biggest of the big trade shows, which would be Las Vegas, Orlando and Chicago. So I haven't heard. You mentioned Orlando and Chicago. What's your feeling about those two markets?

Zahava (13:49):

It's not so much the city. It's where are the tech trade shows? And the problem is most startup tech trade shows are either San Francisco or New York. An example is tech crunch, which does it in most cities. There are not a lot of trade shows for tech startups. Right? CES has developed Eureka Park over the last few years to fill that need. So we go to tech trade shows that have either startups or investors. There just aren't very many of them.

Janet (14:12):

Okay. So I'm going to put you in the hot spot here and say, okay, we've just crossed over into a new decade. What do you think is going to be coming up for us? And I'm only gonna ask you for like a couple of years, I'm not going to check back with you in 10 years, but next couple of years for the startup industry, for investors in this space, is a more happening, less happening? Is it more exciting? Is it getting more focused? Is it harder to be a startup?

Zahava (14:43):

I can tell you first of all, what are the hot tech trends? Because I go to events all the time and being that the Bay area is cutting edge and early adapters, I have a sense of what's hot and what's not. And I also talked to a lot of investors behind the seat. So some of the hot topics right now are anything to do with internet of things or sensors, anything to do with big data analytics and how retail users are using that type of data. Cyber security and privacy issues are huge. And also anything to do with how the internet improves your daily life. Health and wellness, MedTech, health and wellness, things like that. So that's kind of some of the topics. And of course AI robotics and machine learning, which is now being utilized. So investors are looking for those kinds of markets and market opportunities.

Zahava (15:33):

Yes, there will always be huge innovation. I think there'll be more and more of it because we have more access resources on the internet, more tools that help startups develop. So I think the market will continue to grow. The challenge will be that investors want to see a higher level of success before they invest in you and that's what I hear from a lot of startups in the early days of investing you could get by with 100,000 now investors don't even like to consider less than a million because they know how expensive it is to hire developers to do a marketing plan to do advertising, all that type of thing. So a lot of startups are using a lot more friends and family funds initially to get to the point of creating a product or are they using campaigns like Kickstarter, Indiegogo where we call proof of concept and then once they have that or they have a market traction, then they go out and seek investors funding.

Janet (16:28):

so you think they're going to be more successful if they already have customers and they already have revenue streams?

Zahava (16:35):

it's huge. The number one thing I tell startups is when they're doing a pitch, don't bury the lead. If you have customers, if you have a revenue stream, if you already have a product, if you have a loyal following, start with that. When you're pitching, because that's the most impressive thing is they call it traction. The investors want to know you have traction and that you're scalable and even if you have a small marketplace, it shows you have the room to grow and that's what they're looking for.

Janet (17:01):

So now let's look ahead to what's going on with Angel Launch. What are you predicting for yourself in the next few years?

Zahava (17:07):

Well, I honestly cannot tell you that far ahead. I live in the Bay area pretty much month to month for events because I'm all about what's hot and that's why I've been successful. I constantly change my business model, the theme of my events, the format, depending on what's happening in the event marketplace. We have a lot of events in the Bay area for venture capital, and so you have to offer features that make people want to attend. You have to have good startups, the networking, valuable information and education. So I'll probably keep doing what I do now, which is evening events. Venture for summits is a way to enhance the local ecosystem.

Janet (17:45):

Well, I wish you a lot of luck and I hope that 2020 and beyond is very good for you.

New Speaker (17:52):

Thank you so much. I appreciate being here.

Introducer (17:56):

Thanks for listening to Trade Show Live On the Road, a production of the Trade Show Manager, a trade show consulting firm. If you need innovative programs to engage attendees, exhibitors and sponsors, custom research or new solutions for your trade show, hot tech, the Trade Show Manager on our website, thetradeshowmanager.com.