Investor Presentations are Different
Investor presentations are unlike any other type of presentation. They're more demanding than the corporate, technical, or academic presentations you may be accustomed to. It takes considerably more time, effort, and mental stamina to prepare a great investor presentation.
Why are investors such a tough audience?
These "first meetings" (or venture fairs) are screening events with the odds stacked against you. Investors meet ten companies for every one they investigate in depth (the "second meeting"). Consequently they're trolling for any reason to screen you out. You have ten minutes to steer their thinking to 'yes' and beat the odds.
- Active investors see lots of companies like you every week, some in the same space and with similar products. The burden of proof is on you to convince them you're not like all the rest and deserve a closer look.
- Investors are a mixed audience. As you make the rounds you're pitching to people with a range of knowledge- from zero to expert- about your technology and industry. So, adding to your burden, you have to educate as you persuade and elucidate technical concepts in plain English.
- They're rushed, in a hurry. Active investors are busy sourcing new companies to invest in, running other businesses, and raising money for their funds. They have short attention spans. You get their full attention for only a few minutes. After that you have to earn it.
- Experienced investors are expert at sniffing out all the ways your plan might go wrong. But, being rushed, the reasons they say 'no' are sometimes subjective and rash, conjured from hearsay about your industry or a shallow understanding of your model. Your challenge is to design a pitch that anticipates and deflects all the ways your message can be misconstrued.
There is a silver lining. Once you get beyond their initial defenses you'll see that investors are not the impatient, jaded, skeptical, rush-to-judgment people they seem at first. They have an upbeat side you can tap into with a well-tuned presentation.
Investors love working with entrepreneurs. True innovation excites them and they admire the entrepreneurial gift for seeing opportunities where others don't. They're intrigued by strategy and appreciate artful execution.
They're driven to find that rare, charmed company fated to be the next big break- out. If you convince them you're it, the testy people you encountered at the start of the meeting transmogriphy before your eyes into engaged, resourceful supporters eager to be a part of your success.
The Five Sins
... or, how to piss off investors in the first five minutes
It's my habit to ask investors, "What is the biggest turn-off you see when you hear a company presentation?" The Five Sins summarize the negatives I hear most often.
If you commit any one of these, investor response is immediate. It may be passive: they tune out and start searching for ways to end the meeting. Or aggressive: they interrupt with questions and take control of your show. If you consistently get interrupted before reaching the fifth or sixth slide, you're probably committing one or more of the Sins.
These warnings are not only for novices. I've seen serial entrepreneurs and seasoned executives fall into these traps. Any one, taken to excess, could doom your presentation and nothing else in these Guidelines can redeem you.
The First Sin: Not Knowing the Audience
If you demonstrate ignorance of what investors need and want generally, or of basic facts about the particular investors in your audience, you're dead. They're investing precious time to meet with you and they're insulted if you're too lazy to learn even a little about the people you're meeting with. In the worst cases you come across as being self-absorbed, consumed by your own affairs-r-behavior that brands you as "not CEO material."
When investors confess to me about this Sin, they get visibly angry. That's why I put it first.
The Second Sin: Too Much Detail
At this first encounter, investors want only a high-level snapshot of your company. When they want second-level detail, they'll ask. Too many extraneous facts, too many secondary ideas, too much technicaljargon pushes them to the limit of their patience and charity. Seek to describe the essence of your business in broad outline, at "top-of-the-trees" level. Though hard to do well, it's a necessary CEO skill.
A related transgression is showing up with a presentation that is too long. You lose their confidence if you can't deliver a concise overview. Scale your presentation so that-e-uninterrupted in rehearsal-r-you get through it in ten minutes, twelve max. It's critical to lay out your full story before investors take over. It's how you set the frame for the ensuing dialogue, avert misunderstandings, and spin tricky issues to your advantage.
The Third Sin: Dwelling on the Product
If you spend too much time discussing your awesome technology or cool features of your product or service, investors see you as a technologist unfit to lead a business.
Even veteran entrepreneurs struggle to find the right product/ business balance. Either they've lost perspective from being deeply engrossed with product development or they're stuck in features-and-benefits mode from making so many recent customer pitches.
Remember, when pitching investors, sell the company, not the product. Pitch the whole business- marketing, competitive strategy, revenue model, etc.- at a strategic level. Dwell on how you build a sustainable, scalable business destined to command significant market share. Product and underlying technology is a subplot of this business story.
Yet, a warning: Don't over-compensate and omit technology altogether------especially if a break-through innovation is what powers your value proposition and competitive advantage. Explain technology to the extent necessary to show why you have an edge in the market and unfair advantage over competitors. But don't just drop in slides from a technical presentation; make a fresh effort to explain your tech clearly, concisely and in plain English.
The Fourth Sin: Crappy Slides
Many presentation disasters can be traced directly to the wrong use of PowerPoint slides. Cluttered slides, too much text, overly-complicated and confusing graphs, illegible fonts, ugly color combinations- all contribute to a miserable audience experience and trip up the presenter.
You get away with crappy slides in corporate, academic, and scientific settings where awful presentations are the norm and everybody perpetuates the same PowerPoint worst practices. But that excuse won't fly with investors. The burden is on you to be clear and concise. Crappy slides make you confusing and boring. They'll feel sorry for you as they screen you out.
There really is no excuse. It's not hard to turn slides from a liability into an asset. It takes attention to a few simple rules some attitude change. The section on slides, below, will get you started.
The Fifth Sin: Clueless Delivery
No matter how good your slides, your story, your company, if your delivery in front of a live audience is labored and clunky, you'll never be taken seriously as a CEO.
Yet, you don't have to be a slick presenter to satisfy investors. Just adequate. They'll overlook a few mistakes and nervousness. So apply yourself first to avoiding the most egregious errors such as presenting with your back to the audience, reading off the screen, talking way too fast, being oblivious to time constraints, mumbling, droning.
To be adequate, learn to make good eye contact, speak in a clear voice, set a conversational pace, and smile. If you know you have a problem, get a coach. If you're an experienced presenter, ensure success by rehearsing.
This excerpt is from How To Talk To Money, by Steve Bowman, "The Pitch Doctor"
Steve offers a variety of coaching, training, and books for start-ups as well as seasoned entrepreneurs.