Be memorable by painting a compelling picture of the future
You’re standing in the lobby waiting to be called up. You feel a little tense but quietly confident. The teaser deck obviously hit the spot and the invitation to meet face to face came almost by return. You’ve been rehearsing with your co-founder for the last few days and believe you have a great story to tell. “You can go up now” says the receptionist, and so the moment of truth arrives.
You feel well prepared having already taken the first big step - a carefully crafted pitch deck. For more on pitch deck creation read What do investors want to see in your pitch deck?
But what else do you need in your armoury? How should you manage the meeting itself? And what are the classic pitfalls you must avoid?
From our experience of many hundreds of investor meetings, we’ve put together a 10-point checklist: The golden rules of the investor pitch meeting. These should help you develop the essential ingredient of trust, the cornerstone of this meeting. As Mark Suster, US serial entrepreneur turned VC reminds us "..trust that you can deliver on what you say you’re going to do, trust that you will follow up when you say you will, trust that you will be a pleasure to work with, trust that in good times and bad you’ll be committed to making the investment valuable."
I want to acknowledge before we dive in that this is not a ‘one size fits all’ game plan. There are many different types of investor including VCs, Corporates, Family Offices and high net worth individuals. Each one will have different priorities and expectations. Meetings can take place in many different settings, with different numbers of people, some of whom you will already know and some you’ll be meeting for the first time. This is therefore not a cookbook for every scenario but hopefully a collection of useful ingredients you can combine together for your particular moment.
The Golden Rules:
1. Know your audience
Who will be there? What are their backgrounds? Do you know their interests? So much of this is possible to check online these days but don't leave it until you are standing in the lobby minutes before the meeting. If you are meeting a Partner in the fund, try and research their current portfolio of investments. What kind of businesses do they like? Is your business in this mould, if not, perhaps this is a talking point? If you know who else is attending, perhaps an Associate who may subsequently be asked to undertake research into your company, do your homework there too. If people see you are informed it shows you are thorough and interested in them.
Do you know your audience?
2. Be organised
This sounds really basic but it’s often the small things that can mess up a meeting. Turn up 10 minutes ahead of time and if possible, get access to the room and check the IT. Even though we put a man on the moon 50 years ago we still seem unable to find a fool proof way to connect a laptop to a screen in less than a minute. Get this sorted before the meeting begins. Have multiple backups in case you have problems, including a USB stick and paper copies in case all else fails. You’ll hopefully never need to use them, but it will give you peace of mind. Leave nothing to chance so you can keep your attention focused on the conversation, not the kit.
Are you ready?
3. Build rapport
From the off be friendly, have a firm handshake, clear eye contact, and smile. Don't be in a hurry, make introductions - you and your team, the investor and their team. If the Partner brings in an Associate or another junior member of their team, make sure you know who everyone in the room is and involve them in the conversation. As mentioned above, they could be playing a key role in the next steps. If you encourage an active conversation everyone will feel engaged.
Be inclusive and keep this up all the way.
4. Start strong
As you transition from introductions, don't rush into the pitch. Hold the visuals for a few moments. First make clear your company purpose by verbally describing your mission in a short (1 minute) introduction incorporating a single declarative sentence that defines your business – the opening gambit.
Then, with everyone’s attention, transition into the opening slide - the investment overview. This summarises why you are there (2 minutes) and in doing so takes the initial tension out of the meeting.
So, at the 3 minute mark your audience should be sitting up, engaged and wanting more. Shift confidently into Problem / Solution.
Once you are through Problem / Solution the emotional buying decision will have been made.
5. Be memorable
The investor will have probably met several other companies already that day. How are you going to stand out? How will they remember you when they reflect on the dozens of meetings they have had during the week? Our key observation here is that experienced entrepreneurs quickly get into ‘story’ mode, wrapping the narrative around real-life stories to make it come alive. For example, a customer story; their challenges / their pain / your solution / and then great outcomes.
Good stories are those that are built around compelling images and graphics, not pages of bullet points, confusing jargon and technobabble. Research shows that messages delivered as stories can be up to 22 times more memorable than just facts.
What will your story be?
6. Be credible
This seems obvious - you have to know your stuff. My yardstick is that if you can’t confidently give your pitch without constantly looking at your slides, you’re not ready. Make sure you have a solid grasp of the key details too. Have the critical metrics in your head.
For an SaaS business for example: What’s your MRR? CAC? Churn? How many users do you need to break-even? What’s your current runway? When are you cash flow positive? Know your numbers. “I’ll get back to you on that” is not an option, unless it's on a really obscure point. If the answer’s on a later slide, no matter, answer the question straight away, be succinct and then check for understanding. Actively listen to the feedback and adjust as you go. This is where your co-presenters can really help.
Do you know your stuff?
7. Be proactive
Well before the meeting, brainstorm all the tricky questions that might be fired at you and write down a full Q&A with your team. Make sure everyone is on the same page, literally. Know who will respond when these questions come up. For those topics you might be dreading - the ones you hope will not arise as they may expose some weakness – think smart and consider bringing them up proactively.
If you’re hoping that the investor won’t be aware that a co-founder quit 6 months ago, or that you’ve had issues filing last year’s accounts, or you had a down round recently, think again. If the Associate or Analyst supporting the Partner is doing their job they’ll know all of this before you walk into the room.
8. Keep the meeting on track
Its your job to manage the meeting. Know that you can pitch your deck in less than half the time allotted (i.e. 30 minutes max for a 1-hour meeting slot), so you have plenty time for questions and discussion. Things rarely happen in a nice orderly sequence so be happy to go with the flow, especially if there is good, positive engagement.
Keep it light, try not to get bogged down on peripheral issues and show you can manage the meeting. If you can’t manage a meeting why should they trust you to manage the Company?
Be confident, keep things moving.
9. Ask questions
Don't let things get too one sided. If you’re unsure why a question is being asked, probe for understanding. If things are veering off track, consider using a rhetorical question to pull it back. If you want to know more about the fund – and you should – then ask. Show interest. You will be judged on the questions you raise as well as the answers you give. If you get to the end of the meeting and you haven’t asked any good questions, they’re going to think you’re desperate.
Also, make sure you take notes when not speaking so you can review all points that were raised in the debrief afterwards.
Keep learning as you go.
10. Finally, don't forget to close!
A trial close is important and expected. Are they interested? Is the quantum and timing going to work for them? Would they lead? What are their views on syndication? What is their process? What are the next steps? The answers will likely not be precise but the way in which they are answered should give you clues.
Don't be afraid of the ‘no’, at least you’ll know where you stand. The best you can hope for at this stage is probably a ‘conditional yes’, otherwise known as a ‘slow yes’. Unfortunately, a ‘slow no’ is much more common.
Ask for the money!
Now you have the golden rules under your belt, what are some of the classic pitfalls to avoid as you deliver your pitch? Here are our top 4:
A very common mistake is to gloss over the problem and spend a disproportionate amount of time on the solution you have created. Make sure you first clearly define the industry problem you are solving, and make sure it's a BIG problem. The problem must come alive and feel real. A good way to do this is explain how people are trying to solve it today (and presumably failing). Use real examples.
If you don't manage to convince the investor there is a big problem worth solving, no amount of solution pitching will help. You simply won't have the basis of a proposition. Check for agreement on the Problem before you proceed to the Solution.
Lack of focus
This is a particularly high risk for ‘platform’ businesses that have the potential to serve multiple markets and applications with the same tech. Be 100% clear on your beachhead market and describe your plan. Make sure your use of funds - as well as your early revenue opportunity - is directly linked to this beachhead. Don't try to cram every detail of the future opportunity into this first meeting. Resist the temptation to talk about all the things that might be possible in the future. Show you have a plan and are focused.
Tied to your material
Don't panic if you get blown off your flow with questions. Unless the answer is about to be revealed on the next slide then answer questions straight away. If it’s clear that the investor is fixated about a particular issue, don't skirt around it just to get back to your slides. Answer it, check for understanding, then move back to the flow when it feels right. Show you are comfortable on your feet.
Remember you have your co-founder with you, and they need to say their piece too. If they don't contribute and you do nearly all the talking it will look bad and send the wrong message. Plan in advance who will present certain slides and who will answer particular questions. Don't talk over each other. Present as a team.
In summary, be prepared, start strong, keep things on track and present as a team. Before you know it, your time will be up!
About the author: John Hall is CEO and co-founder of Duet Partners. His 30-year tech career began with major US semiconductor and software companies, and was based in the Valley during the late '90's. Before Duet he was CEO of a VC-backed consumer electronics company, sold in 2009 following several rounds of capital raising. In the past 10 years since starting Duet he has advised dozens of founders on the startup to scaleup journey and is a retained Board advisor to a number of UK technology companies.