The big investor meeting has finally arrived.
But somehow we come out of it with a foot in our mouth, not with a deal in hand.
We have made missteps ourselves.
And we’ve seen many renewable energy entrepreneurs, project developers, and executives slip up when pitching to us and our investor partners, too.
Thankfully, there is hope.
“You will only fail to learn if you do not learn from failing.” - Stella Adler
In that spirit of reframing embarrassing missed opportunities when meeting with investors who could have changed the fate of your business…
...please do NOT DO these things the next time you’re pitching to an investor.
1. DO NOT create a slide deck longer than, say, 15 slides.
Investors, like you, are busy folks.
And as a former CEO and mentor is accustomed to saying, “A new bus comes by every 15 minutes.” The “bus” here refers to another deal in which they can invest.
You should assume that you have 15 minutes or so to convince the investor that your business is worth their time and capital. So, get to the point early in the meeting.
2. DO NOT squeeze your entire knowledge base into each slide.
I’m sure that are the expert on your business. And it should be clear that you’re passionate about it.
However, remember that white space is your friend. Super dense slides have the opposite effect on audience comprehension and retention.
Also consider adding a bordered text box on each slide with the main takeaway you want to stick in the investor’s mind.
3. DO NOT start the meeting before engaging in some pleasantries.
When I first began working in private equity, the leadership team would often spend one-fourth of the meeting on small talk. I was puzzled.
With my “get ‘er done,” Dr. Efficiency mentality, this seemed like a waste of time. Ah, the arrogance I had.
Those Southern pleasantries were of immense importance. They were about establishing rapport, mutual contacts, and areas of common interest inside and outside of the professional world.
What I learned is this…
Despite the investor vs. presenter mentality, these meetings are just another discussion between people. And people trust and like to do business with people they can relate to.
4. DO NOT talk about the investor’s business, as if you understand it better than they do.
To be clear, you should do your due diligence on the investor. You should definitely understand who they are and who they are not, what they can and cannot invest in, etc.
However, do not talk about their business based on their website (e.g., it could be outdated) or based on what you’ve heard second hand (e.g., there could be deal- or time-specific factors that make this market intelligence irrelevant to you).
5. DO NOT get into lots of technical details unless asked.
Most investors are not technical experts in your industry or about your product. For sure, they will need to become more fluent in the details, but not in your first meeting.
More importantly, you need to start big picture: Strengths of the industry and how you ride that wave, challenges in your sector and how you address them, the problem you’re solving for customers, the reason your business has an edge relative to competitors, and why you have the right team.
So, first hook them, assuming it is a fit regarding their investment criteria, available capital, and so forth.
Then, later reel them in with nitty gritty details, as required, to educate the investor on why you will succeed and deliver the appropriate return on their investment capital.
6. DO NOT refute feedback from the investor, as if they are uneducated newbies.
“Feedback is the breakfast of champions.”
This was a problem for me many years ago. Criticism was a threat. Ah, such a fragile little flower I was.
And when I first presented about the business logic of green building many years ago, an investment executive questioned a fundamental part of my thesis. In a room full of investment professionals, he had put me on my heels.
But his goal was not my explosive destruction. Instead, he wsa offering great feedback, and I needed to incorporate it in future meetings like this.
So, step out of your protective glass bubble.
Don’t get defensive. Instead, provide a counterpoint if need be, but emphasize that it is a good point, and you will give it more thought, discuss it with your team, or do some more research.
7. DO NOT go too blue sky with overly ambitious and far off projections.
I can’t tell you how many pitch presentations I have sat through where I thought:
“If those projections are correct, then I need to quit my job in finance and go work for this startup or project developer.”
So, avoid the borderline unbelievable projections for your business or for the market in which you’re operating. Even if you believe they are real.
And only rely on the most trusted data sources. Referencing something like www.ecodorks.info from 10 years ago as the basis for your strategy will not work.
Lastly, do not flash forward to what the world will look like 15 or 30 years from now. Investors care about what will happen mostly within the period of their investment with you.
This doesn’t make them callous, profit-driven robots.
This makes them good investors, often serving as fiduciaries to protect and generate returns for their investors (e.g., pension funds).
8. DO NOT show internal disagreement among your team.
No team is perfect alignment all the time.
(Obviously, you’re opinion is the only correct one though.)
But do not let any difference of opinion or lack of group confidence come across during your investor meeting.
One. Unified. Force.
9. DO NOT leave the meeting without asking for advice.
I received some great feedback before raising angel capital for one of my startups:
“If you want capital, then seek advice. If you want advice, then seek capital.”
This worked well for that raise. I went seeking advice, and never led with an ask for capital. But I raised the capital we needed.
Don’t get me wrong…
If you have done your due diligence on the investors, and you know that they are a good fit for your business, then you should include an “ask” slide in your meeting regarding capital needs.
But their advice can sometimes be more valuable than the capital they might or might not provide.
Said differently, intellectual capital or network capital can be as important or more important than investment capital in growing a successful business.
10. DO NOT show up late, or go over your allotted meeting time.
“If you’re on time, then you are late.”
Or so it is often said among military professionals.
Being on time for the beginning and end of your meeting is a sign of respect. And respect is the great foundation for an investor-entrepreneur relationship.
11. DO NOT delay on following up to your meeting.
Although Woody Allen suggests that showing up accounts for 80%+ of success, I have to disagree.
Following up is equally or more important.
And that’s partially true because most people are very bad at follow ups.
They might forget about it, or take a week to get back in touch.
Maybe they don’t say, “Thank you for your time.”
Or they don’t sufficiently respond to questions and criticisms raised in the investor meeting.
So, think about a detailed, respectful follow up within 1-2 days of your meeting.
OK, all done.
I hope that was as cathartic for you as it was for me.
Now you know about 11 things to NOT do. But how about the top tips for what you SHOULD do?
Look forward to more details in our next blog post.
(Oh yeah, a cliff hanger.)