What is a Demo Day?
Definition of a Demo Day
A demo day is essentially a showcase day in which start-up companies are invited to pitch their product to investors and to provide a demo.
Demo days are particularly common at accelerator programs like Y Combinator, because it gives participants the chance to show off what they’ve achieved and to seek additional funding. In fact, the demo day is usually seen as the culmination of these accelerators and is the start-up world’s equivalent of senior prom.
Depending upon who’s hosting the demo day, they can vary from being private events that are only open to people with invitations to public events that are open to anyone who wants to come. Others offer a mixture of both, giving investors and partners preferential treatment or one-on-one access to founders and entrepreneurs.
The format of demo days can also change depending upon the host and the goals that they have for the event. Still, they typically include a short amount of presentation time, followed by time for a short Q&A session where potential investors can get clarification on the companies’ business plans.
Time is always of the essence at demo days because there are usually a large number of companies to work through. This means that if entrepreneurs want to make the most of a demo day, they need to be able to get across a lot of information in a short period of time. It’s often the start-ups with the best pitch — as opposed to those with the most potential — that end up taking on investment and receiving the lion’s share of press coverage.
Crafting an effective demo day presentation is as much of an art as a science, and it often leads to sleepless nights for busy founders who are struggling to find enough time in the day to get everything done. With that said, as well as giving them the best possible shot at taking on new investment, there are other benefits for entrepreneurs who take part. Perhaps the biggest of these advantages is that the demo day presentation is often the first time that the founders sit down together and formalize things like their mission statement and their growth projections.
It can also be a challenge to host a successful demo day, because the company or organization behind it needs to be able to get the right people into the room. This usually includes a mixture of investors, mentors, journalists and corporate sponsors, as well as the entrepreneurs themselves.
Demo days can be held either in-person or online, with the latter rising in popularity in recent years due to the COVID-19 pandemic and an increasing focus on working from home. However, in-person events are still more popular due to the serendipity that can come from having a large number of like-minded people in the same room.
One of the biggest mistakes that start-up founders make when they think about demo days is that they try to convince investors to make them an offer right there on the spot. The problem is that demo days aren’t Dragon’s Den.
The clue is right there in the name: demo days. If they were investment days, they’d be called investment days. The purpose of demo days is for start-ups to show off where they’re at and they often act as a sort of early hunting ground for investors, but investors are typically just trying to get an idea of what’s out there on the market.
Because of this, your goal as an entrepreneur is often to catch people’s attention and to leave them feeling intrigued about your product. It’s a little bit like going to a speed dating event. You don’t want to try to seal the deal with the first person who shows any interest in you. You want to leave them with their curiosity piqued so they ask you out on a second date.
Remember that because investors see so many different presentations in a typical demo day, they usually start out with the assumption that they’re not going to like each start-up. Your goal is to get them onside and to show them why they should break that standpoint and go out of the way to learn more about you.
When was the first demo day?
It’s hard to say exactly when the first ever demo day took place, but we do know that Y Combinator held their first demo day in 2005. Y Combinator is one of the biggest and most popular accelerator programs and so it was this demo day that most people remember and which helped to establish demo days as a common part of life in the start-up world.
What makes a good demo day presentation?
Time is always limited at a demo day, and so you’ll need to keep things short and to the point and to cut out any unnecessary material. Remember that on a typical demo day, investors watch presentation after presentation and so it’s easy for their attention to flag, especially towards the end of the day.
It’s a no-brainer, but it’s also super important for you to practice. You should practice your demo day presentation so many times that you can do it in your sleep – or at least so that you can deliver the talk perfectly without any slides or preparation. That will ensure that it comes out as smoothly as possible when you get your time in the spotlight.
What should my demo day presentation include?
One easy way to build out your demo day presentation is to think about Kipling’s questions, which come to us from author Rudyard Kipling. Ask yourself:
- Who: Who does your start-up aim to reach?
- What: What is it that your start-up does?
- When: When do people turn to your start-up’s products and services?
- Where: Where do they turn to find your start-up?
- Why: What is your start-up’s reason for being?
- How: How do you plan to get from where you are now to where you’re going to be?