When Money is the Audience
Investor presentations are unlike any other type of presentation. They’re more demanding than the corporate, technical, or academic presentations you're used to. Yet the future of your company is at stake. The first ten minutes of your first encounter with investors could determine whether you get funded, or not.
If you aren’t convinced, then review the five ways investor presentations are unlike other business presentations. Take to heart these five reasons why you can’t just “wing it,” why you can’t throw it together the night before and hope to charm your way through the meeting. These are also the basis for a different approach to shaping your content and slides.
1) It’s a Ruthless Screening Process
“It’s my job to say ‘no’.”
These “first meetings” (or venture fairs) are screening events with the odds stacked against you. Investors meet with ten times more companies than they have time to investigate in detail (that is, to grant even a “second meeting”).
Active investors see lots of companies like you every week—some in the same space and with similar products—and the burden of proof is on you to convince them you’re not like all the rest. Consequently they’re trolling for any reason to screen you out. You have ten minutes to beat the odds, to steer their thinking to ‘yes’ and convince them you’re special.
Did I say ten minutes? It’s actually less. Investors admit that they often decide “no” within the first few minutes of the pitch. They’re just being courteous after that point.
2) You’re Selling the whole company
When pitching to investors, you’re selling the whole company. Investors buy for different reasons than customers do. You have to make the shift from a tight focus on product features and benefits to a wide-angle survey of all the things you’re doing to build a sustainable operation—while simultaneously doing everything you can to survive in the short-term.
It’s particularly hard to make the shift if you’ve been doing a lot of customer pitches recently, or you have a background in corporate sales and marketing, or you’re fundamentally an inventor and technologist and still learning how to grow a business.
Selling the whole company compounds the difficulty because not only is there more to cover, but the pieces are more complex, complexly interconnected, unique and varied, … myriad variations on even basic business models … (even less conducive to presentation formulas). To convey a clear message you must be clear on what’s critical to the central business story, what investors need to hear, and what can be left for later. fix
3) You’re Selling the future
Adding to the difficulty, you’re selling the vaporous future potential of your company. You’re selling more promise than performance.
Of course, you make the most of whatever past performance or proof of concept you can point to. But at the heart of the pitch is a appeal to investors to accept your vision of where your company will be in the next two, five, or even ten years. You need to convince them that customers will flock to pay money for your offerings, and that your insights into current trends and anticipated the future behavior of markets and the counter-moves of competitors are all correct.
Plus, you have to convince investors that your current team is up to the challenge to not only design-build an innovative company, but also to navigate the storms of rapid growth. … endure the onslaughts …
4) Investors are a Professional Audience
Active investors see many, many pitches, sometimes as many as a dozen a week. It’s their job. And, believe me, much of their impatience comes from sitting through more bad ones than good ones.
Such a professional audience leaves you little room for error … won’t give you much slack. They pick up on clues in the first few minutes and the first few slidesand start filling in the blanks, following implications, and jumping to conclusions about you and your company. Quick judgements and pattern recognition is their job too. This can be or downfall or you can turn it to your advantage, depending on how well you plan for it.
They’re comparing you to all the presentations they’ve seen in the past. Occasionally, they see a really great presentation, so they know what’s possible. They know how a team can come in and explain, in ten minutes, just enough about a complex business to get them excited. It’s a high bar.
And they’re specialists in the start-up space. The best investors have seen a vast cross-section of companies go through full life cycles. They know all the things that can go wrong. Chances are you don’t have that experience. But they also know what it takes for a young company to be successful and go all the way—something you can tap in to.
They may even know your industry better than you do, either from direct experience or indirectly from watching other start-ups. They’ve comparing you to other companies with similar ideas they’ve seen, possibly on the same day. They aren’t easily bluffed.
5) It’s a CEO Audition
Your performance as presenter is a big factor in the success of an investor presentation. Compare this to your average business presentation where the audience will overlook a bungling presenter so long as the content is worth their time. But investors are judging all the ‘soft’ people factors of this first encounter as much as they are the business merits. It’s a CEO audition, and the first thing they’re scoring is how well you communicate.
This means that the quality of your delivery—how you relate to the audience, use your voice, and work with the slides is important. There’s no room for excuses for unreadable slides, lack of clarity, or taking too long to get to the point. They’re registering intangibles too: Are you easy to listen to? Are you confident and assured? Do you have a sparkle in your eye and passion in your voice?
Take to heart these five reasons. Accept and plan for the fact that it will take you considerably more time to create a presentation that wins over investors. It also takes mental fortitude and a fresh approach—especially if you’ve been giving conventional presentations for a long time, which means you have a lot of bad habits to unlearn.
If you're serious about raising money, give the investor presentation project top priority, right up there with finding customers and building your team.