On the road show: Coaching improves investor presentations
Potomac Tech Journal
By Alex Ramsey
The conference room is so still, the pounding of your heart sounds like a drum thumping. Your hands are numb, your mouth dry. Three pairs of eyes stare at you, three people who hold the power of your future. You have one hour, maybe less, to win their favor or lose the opportunity forever.
Welcome to the road show – the world of investor presentations.
Getting to this point takes a persuasive business plan, connections and street smarts. But once you have arrived, knowing what to do next is another matter. The stakes are high. Unfortunately, even seasoned executives think the pitch can be a spoken version of the business plan.
This is not true.
If business plans could sell, “one click” and investors would return a check. You have to do the selling, not the plan. A pitch is a different medium of communication. Some information will be the same, but what to include and how to deliver it are the keys to success.
The following are what I call “The Five Lode Stars,” guiding principles designed to help entrepreneurs stay on track — and they work. Excel at all five, and you increase your chances of success.
Focus your content
Investors have big egos; and they don’t like to hear other people talk. They do like to make money. They make money when your business makes money; so, mostly they want to know how your business provides compelling value to the marketplace. Get this across up front and early.
Most entrepreneurs talk too much during a first meeting. If you can’t tell your story in less than 15 minutes, you are not ready to make your pitch. Then, turn it over to the investors; let them ask questions and drive the level of detail. If they are interested, they will ask lots of questions and request a second meeting. If not, best to move on.
Content has to be just right
In your introduction, you hooked them on the big picture. Now what? Make sure you substantiate the market. Describe how your product uniquely meets market needs. Include information about the competition and your business model. (Again, how do you make money?)
The management team is critical. Describe what you need to launch the company and your projection on the return. This all has to be at a high level.
Most entrepreneurs include too much technical detail. Can you hold the interest of a reasonably intelligent 12-year old? That’s about right for the first pitch. Most investors are not technical experts.
Don’t use acronyms, but do use common sense. One investor may have an engineering doctorate from MIT, but his partners may have degrees in law and German literature. You are speaking to them all, not just one. Alienating or making an investor feel stupid is not a good idea.
Research tells us presenters unable to differentiate themselves and their products are quickly forgotten and easily discounted. Don’t let this happen.
Investors see and hear hundreds of plans annually. Both your product and you must be memorable. How? Simple.
Besides making it clear how your idea is different, communicate your unique personality using personal energy. No one else has your personality. It is by definition unique.
Videotape your presentation, and watch it without sound. If it’s boring soundless, it will still be boring with sound.
Be more expressive by using more energy. You are more likely to stand out from the crowd.
Have a fire in your eyes
With whom would you rather start a company? The apathetic nonchalant or the person passionately committed to success? If you can’t express heartfelt commitment, investors will never buy into your idea.
A few sentences personalizing why this idea is important work wonders.
Tell the truth
During a first meeting, you obviously cannot tell everything you know about your idea. Understandably, you want to present it in a favorable light. Just make sure that what you do say is accurate to the best of your knowledge.
Speak honestly, and don’t overstate financial projections. Remember, these guys may become your partners. Once you violate their trust, you can never win it back.
You’ll notice nothing here indicates you have to be something other than what you are. Be yourself, and speak from the heart as well as your head.
Note, too, there’s nothing here about the need for slides because they are not critical to your success. One entrepreneur thought the more complicated he made his idea with complex and confusing slides to boot the more highly investors would value it.
He eventually did get money, but it took meeting 100 different investors, during which time he learned to communicate the idea on a cocktail napkin.