An investor meeting is a presentation of your business idea to a venture capitalist or angel investor in hopes of obtaining their funding. These meetings are increasingly foundational to startup success: Every year, tens of thousands of small businesses are funded by investors who see potential in their business.
According to angel investor Basil Peters’ Angel Blog, angel investors and venture capitalists respectively fund 16,000 and 600 businesses per year.
Long after you secure your funding, you can also expect to hold regular meetings with your investors. These meetings typically cover how your company is performing, future plans and projections, and how the invested money is being spent. Hoover, for purposes of this article, we’ll focus on that initial meeting to secure your funding.
Research the Investor
Some entrepreneurs will reach out to any potential investor they can find. While the adage of leaving no stone unturned can work in your favor in some areas, it actually may waste your valuable time when searching for funding.
The reality is that most angel investors or venture capitalists specialize in certain types of ventures or businesses. They may be interested in specific sectors, companies that are in a specific stage of development, those that produce a specific return and more.
Avoid spinning your wheels unnecessarily by chasing after investors that likely will not be interested in your request. A smart idea is to thoroughly research the investors using public information, such as on their website, through social media platforms, in news articles and more. Pay attention to their current portfolio, and develop an understanding of their backgrounds, investment preferences, successes, failures, interests and more.
Write Your Executive Summary and Business Plan
Potential investors want to review your executive summary and business plan to gauge their interest in even holding a meeting with you. This means that your written plan needs to sell the company to the investor in a way that speaks their language.
An executive summary will highlight the relevant facts about the company, your products and services, and your target market. Remember to refine your summary based on the specific investor you are trying to target. You absolutely must demonstrate that you have a firm understanding of your market’s size and demographics, and your customer profile. You also must explain your value proposition to this target audience and demonstrate how you are a better option than the competitors.
Your business plan should identify key milestones that you want to achieve with the help of investor capital over the next 18 months. While you need to write this information clearly and concisely, you also need to be able to discuss it during an investor presentation in a more in-depth manner.
Prepare And Practice Your Presentation And Pitch
An elevator pitch is a well-rehearsed summary of what makes your company an amazing investment opportunity for the investor. This is more detailed and more sales-oriented than the business plan. Consider using images and chart on a slide show presentation to bring your pitch to life in an exciting, engaging way. In your elevator pitch, delve into the history of the business as well as how it will make the investor money.
The total presentation length should be less than 30 minutes long, and you should plan to spend approximately two to three minutes on each slide. Your presentation should not simply be a summary of what is on the slides. Instead, the slides should be used to support your verbal presentation.
Some investors may interrupt you frequently to ask questions; do not let this rattle you. You should know your material well enough that you can speak confidently about it without reciting a memorized speech verbatim. Try to keep the meeting structured and professional. Your investors are judging this aspect of the meeting as well as the business opportunity in general.
Estimate How Much Money You Will Need And What's that for
As you might imagine, your potential investors want to know exactly how much money you are trying to raise and what you plan to do with the money. The ideal amount of money to ask for is a sum that will fund your plans for the next 18 months.
Avoid asking for less money than is needed simply because you think investors will then less likely refuse your request. Clearly demonstrate how the funds will be used, such as to hire more talent, to expand your warehouse space, and more.
More than that, explain what you think a reasonable split is of equity for their investment and how you arrived at that figure. While the split should be fair, do not give away too much of your equity. When your own income potential is limited, you may lose motivation and drive. You should always know what your bottom line figure is before walking into a meeting so that you can make decisions on the fly.
Know Your Passion, Energize Your Story
Investors may view dozens of presentations per week in some cases, so you need to ensure that your passion for your venture stands out. Make your presentation noteworthy during the first few minutes so that you grab their interest.
For example, telling a compelling story as an opener is a great idea. Remember that the investor is investing in you and your team as much as they are investing in the company. Therefore, build credibility, and explain your education, background and overall interest in what you are presenting.
They should be able to clearly understand why you feel so passionately about your products or services. Your investment request should make sense from a numerical standpoint, but you also need to develop a relationship with these investors from the start. Focus on selling yourself as well as the opportunity to your investors.
Have a Q&A Session With a Hostile Audience
After your sales pitch that lasts approximately 30 minutes, you will next have to go through a rapid-fire series of questions from the investors. Investors will try to catch you off guard to ensure that you know your stuff.
Therefore, anticipate their questions, remain poised at all times and thoroughly prepare for this aspect of the meeting. Everything from your business plan to your credentials will be scrutinized by investors. Consider some of the toughest questions that an investor may ask you, and prepare to answer these ahead of time. Some investors may make suggestions, and you should not shy away from these. Instead, accept the advice with open arms, and show the investors that you are receptive to using the knowledge they bring to the table to improve your venture.
Your first few investor presentations may not go precisely as planned, but remember that they are each learning experiences that can help you to grow. After each meeting, take notes about your experiences, and brainstorm things that you can improve on to prepare for your next meeting. It may take you several attempts, but your knowledge and confidence level will increase with each meeting.