Most advice on investor pitches tends to focus on the first pitch – the few minutes you have with an investor who doesn’t know you or your business. Of course you don’t expect said investor to sign a cheque there and then – that first pitch is only to hook the investor, to make them want to know more.
So you managed to hook an investor, and he or she has invited you to a follow-up meeting, which may be an hour for example. What next?
First things first: this is a very different animal, and should not be treated the same as your first pitch. Your objectives are different, and your investor’s objectives are different too.
Having said, that much of the preparation needs to be the same as for any presentation:
- Understand your audience
- Set clear objectives
- Choose a few key messages you want to get across
- Find suitable strategies to communicate each key message memorably.
Let’s take a brief look at each of these in turn.
1. Understand your audience. Every investor is different. You already did your homework, so you know this investor’s likes and dislikes, projects they funded which succeeded, projects they funded which failed, projects they refused, etc. That’s a good start. You may have received some feedback after your first pitch, for example on some areas they were unclear on. You could of course ask, ahead of the second meeting, whether there are any areas the investor would like you to cover in particular detail. There might be – and isn’t it better to know before you turn up? It certainly doesn’t hurt to ask, and the investor may be pleased you’re aiming not to waste his or her time.
One thing is for sure: this time, you will need to have plenty of details about your plans, your roadmap, and your financials. Most investors will only half-believe your financial projections anyway, but if you don’t have something which looks clear and plausible, or you can’t justify your projections when challenged, then you’re unlikely to be deemed worthy of their millions.
2. Set clear objectives. These are your success criteria for the meeting. Aim to have as few as possible. Here are some example aims for this second meeting:
- Set the foundation for a strong business relationship with the investor
- Convince the investor that your business plan is achievable
- Convince the investor that you are the right people to make this business work
- Set a date for a third meeting
Your aim should not be to get through all your slides in the time available without too many interruptions.
Think simply: as you leave the building afterwards, what will define whether you’ve succeeded or not? I’d suggest that if you can achieve the four objectives I mentioned above, you’ll be a happy entrepreneur.
3. Choose a few key messages. Remember that detail is the enemy of communication. However, in a case like this, an absence of detail is a deal-killer. So how do you resolve that? Quite simply, you need to separate the details from your key messages.
What are the three things you want the investor to remember after the meeting? Not five, not ten – three. They may remember more, but if you could choose three things they will remember during breakfast the next morning, what would they be?
Here are some examples, not all of which are relevant in the same situations – choose three, or find your own:
- XYZ Inc has a truly revolutionary patented product
- XYZ Inc needs to raise $1.2M
- If I invest in XYZ Inc, I can exit in three years with a $5M profit
- Investing in XYZ Inc is a low-risk investment with strong returns
- I’m really impressed with how well these guys at XYZ Inc know their business
- I need to move quickly because XYZ Inc are in talks with other investors
- There is a lot of M&A activity in this sector, so XYZ Inc could get bought soon for a big premium
Now, in order to get these messages across, you’ll have to give them details, and if you are unable or unwilling to give detailed answers to their questions, you will soon see the inside of their office door for the last time. However, the details are a means to an end – not an end in themselves. Always have your objectives and your key messages in mind, and use every opportunity to get your key messages across.
4. Find suitable strategies to communicate each key message memorably. Don’t expect the investor to remember particular things by accident, or just because they should. You need to make sure that each of your key messages is communicated properly.
If your key message is that investing in your start-up is a low-risk investment, think how you are going to make them realise and remember that. Perhaps you will decide to identify all the main risks, then carefully dismiss each of them by demonstrating that they are either very unlikely or very low-impact. (Talking about risks is something entrepreneurs rarely do, but which investors think about all the time. What you’re not saying, they are imagining. And perhaps not positively.)
You may decide that you can use some visuals to help enhance your message and make it more memorable. If so, take note of my slide advice below. You might also use videos, and don’t forget that if you have a product which can be demonstrated, then you should demonstrate it – and make sure it runs extremely smoothly.
This is not just a presentation where you take the stage, give your talk, and then ask at the end whether the audience has any questions. This is quality time with an investor. Don’t waste it with one-way communication. So don’t plan your 30-minute presentation and expect it to happen like that. It probably won’t – and if it does happen like that without interruption, your investor is most likely either asleep or bored.
This should be a conversation, a discussion – not a broadcast. But visuals can be helpful – there’s nothing better than a good graph to help explain your investment strategy or revenue projections, for example. So here is what I do in these cases.
First, I split my material into sections, usually around the key questions investors will want to ask.
I then work out what I will need to say in each section to get my key messages across. Everything I say will need to contribute somehow to the communication of those key messages. That’s the test to see whether each point is relevant or not.
Next, I work out whether any of those points need supporting materials to help communicate the message memorably. Many of them do not. Some of them will require tables of data. These do not go on slides. I would simply print those tables and give them to the investor at the appropriate time. It’s far easier to understand tables of data on paper rather than on a big screen. What is more, on the screen I could then put a simple graph which illustrates a key data point from the printed table. This helps me to guide the investor’s attention a little. However, if I only showed the simple graph, the investor would not have enough detail to trust what I’m saying.
I now have a number of points which require some kind of visuals – which could be videos, demos, or slides. I then plan my slides on paper or in a simple text document.
Only then do I open my slideware app and start creating slides. And for this kind of conversational meeting, which most likely will not follow a linear path from beginning to end, I’ll create a particular kind of deck, which is more like a web site than a typical linear slide-deck.
Earlier, I split my material into sections (e.g. ‘Financial Projections’ might be one section). I’ll therefore create a kind of ‘menu’ slide where I put a box or picture representing each of the sections. I then create a title slide for each section, and then I create the ‘content’ slides I planned on paper earlier. So far, hopefully that’s clear, but it’s not particularly special.
The trick, though, is this: once you have created all your slides, go back to the main menu, and insert hyperlinks on each of the boxes/pictures. These hyperlinks should take you to the title slide of each respective section. On each section’s title slide, you should put a hyperlink back to the main menu, and a link to each ‘content’ slide in that section. You could do this in many ways – perhaps by saving each slide as a picture file, then including thumbnails of each slide as hyperlinks. Or you could use text hyperlinks (less attractive, but perhaps clearer). Or create some other kind of icons if you want. The aim is not to impress the investor, though: the aim is to give you a very easy way to navigate inside your slide-deck.
Lastly, on each ‘content’ slide, add icons with hyperlinks: one should take you back to the title of that section, and the other should take you directly to the main menu.
Now with no more than three clicks, and usually only two, you can reach any slide in your deck. So when the investor says: “Show me your risk assessment” you will be able to get to that slide in a matter of a few seconds, instead of exiting the slideshow, searching for the appropriate slide, and then starting the slideshow again.
Of course this won’t work with most ‘clickers’ which only allow you to move forward and back, but in this kind of meeting, you can probably afford to use a mouse to control your slides.
This is also perhaps the only situation when I would give an investor my slides in a PowerPoint or Keynote format, so that they can play around with the menu system as well. Usually I’d only give a PDF handout with plenty of notes.