Most founders don’t know how to present to investors.
I’ve seen it a thousand times… a founder comes up with a great business idea. He or she has managed to get it up and running, and customers are buying. But they’ve been bootstrapping the business and now need a serious injection of cash to grow and scale. So they put together a deck and start pitching investors. And things don’t go well.
The first thing that goes wrong is they are too deep in the weeds. Whether it’s a technology product, or a new type of underwear, when someone has worked as hard and for as long as most of these founders have, it’s easy to get mired in the technical aspects of the process of creating the product and to imagine this is also what investors want to hear about.
Instead, investors want to be inspired, surprised, and delighted because… guess what… they’re human. So presenters should be showing what the product is and what it does. Not telling… showing.
Here’s what I mean. Let’s say, you have a new app that does something easier and better than the ones currently on the market (there will usually be competitors). Since your product is technology-based, you can easily show how it works by taking investors on a virtual tour or doing a walk-through that is projected onto a screen.
If you have a new, physical product that solves a problem, have samples of that product on hand to distribute so the investors can see and feel it. But that’s only the beginning. Tell a story about the problem this product solves. I spoke to a client recently who has a product that soothes physical pain. It’s all natural. So we went through some types of pain a customer might use it for: muscle aches, bruises, sprains, and so forth. Then she mentioned hangovers. That’s funny and funny is always a winner so keep that in mind, too. The more entertaining you can be, the more investors will like you.
The second thing that goes wrong is founders don’t make a clear ask. This is something that requires a ton of pre-work and analysis. Within the first couple of minutes, investors need to know what you’re looking for from them. So have a number and be ready to justify it.
The third thing that goes wrong is it takes too long to get to the point. Even if investors say you’ve got 30 minutes, they often run late and short of time. Be prepared to get your best stuff out in the first 5 minutes including your ask.
Also be prepared for interruptions and questions you hate. Don’t get caught short by thinking they won’t be asked. If you can handle the toughest questions, you’ll give yourself the best chance to get to the higher level discussions.
The fourth thing that goes wrong is when the presenter is boring. Show your enthusiasm for your business. It’s contagious. If you stand up there and deliver your information in a droning way, investors will be checking their (Apple) watches.
There is a client I have who is one of the most charismatic people I’ve ever met. He has a business that is, in my opinion, meh. But because he’s so engaging and he knows how to present to investors, he’s been able to secure funding and grow. Don’t underestimate the value and power of your delivery and interpersonal communication skills.
There is only so much money out there. Avoid these pitfalls by learning how to present to investors and you’ll have the best chance of getting some of it.