Of course this is nothing new, VC’s asking entrepreneurs the question: “do analyst want to talk to you guys?” What a great example of faith in the IT sector. VC’s who think that every IT company is aware of the analysts they need to talk to, just want to confirm that there is an interest in the company which is seeking investment.
There is nothing wrong with VC’s who think that people who need investment are aware of companies like Gartner and Forrester. That general knowledge of research firms would be great! Makes talking about it much easier when the question pops up from the VC. However, is it a realistic question to ask, and is it it fair to presume that entrepreneurs know the benefits from talking to analysts? The general perception is that it costs a lot of time and money to do analyst relations, and that it is a billion dollar club. So my first reaction would be ‘no’.
We have a department for Technology Investors. Great guys that talk to people who need cash and guidance to conquer the market. They like to think, since they work for a firm that offers influencer relations services, that people understand what they are talking about when they discuss analyst relations and vendor briefings. Everybody understands public relations, but many people fail to understand analyst relations.
Some figures to give you folks a nice idea. Last year we spoke to 24 entrepreneurs in the IT sector from the Benelux region who needed an investment. Of those 24, 15 had heard of Gartner and 11 of Forrester. That was it. Never mind the ones who didn’t even know what we meant when we talked about analyst relations or analyst firms. Considering we do business with over 30 research firms ourselves, we were amazed by the lack of knowledge from people that need to be on top of their game. Now I know this is our core business, but than again, research firms have been around for decades.
So it is great to notice that VC’s do more and more business in Public Relations and social media. But how many VC’s are actively engaging with analyst firms after an investment has been made? Life would be much easier for VC’s if entrepreneurs who are operating in IT and need their money and guidance, opened up relations with research firms before they ask for the VC’s services.
And to the other side of the table. If you are an IT company who needs help, don’t think that you need investment before you can get introduced to your core analyst. Increase your chances of getting that investment by talking to people who know the analyst industry. Finding a VC to talk to is the least of your worries. Succeeding and getting the investment from the VC in order to grow your business and full fill your dreams, starts with understanding what preparations you need to take to get the right attention, from the right people, at the right time. Now that you are aware that VC’s are likely to ask you this question, make the necessary preparations.
Best of luck, to both of you.