People often are confused by the term “Story” – they think it’s just about standing around telling anecdotes, insert a meaningless joke or “dumbing down” serious materials to the level of stupid or silly. On the contrary
- Stories are thousands of years old, they’re the reason information has survived from generation.
- Our brains are hardwired for a structured story – while they can’t deal with mounds of data
- We learn through stories – I’ve seen my 3 year old go from chewing on a book to actively discussing elements of the story even though she’s heard it hundreds of times. She gets it and has become a storyteller in her own right
- Stories inspire, captivate, resonate and influence! – aren’t those the things you want when pitching for fundraising or sales?
- And the best thing – Stories are universal – we find storytelling in every culture, religion and geography
Storytelling is the difference between rattling off data and giving it meaning. When we read a good book, – we are swept into the story, time and space falls away – and it’s sad to end it. We don’t look for 100% historical accuracy, technical data or facts and figures – we just give ourselves over to the experience.
Investors need numbers, I agree. Trends, market opportunities – all must be in the deck. But don’t forget – who are you solving the big pain for? When you are crafting your pitch, stay true to your gut. Get back to the basics. Who are you truly solving the pain for and how much will they love you for it? The way you tell the story can then be from a very personal perspective – either yours or someone close to you. People identify and resonate with stories. Stories are memorable and also you can’t really argue about the veracity of a personal story. There will be plenty of time for the facts and figures later – the story is the hook!
Omer Perchik, CEO and Founder of Any.do, who has raised several million dollars and grown a very successful company chimed in and said: “The ability to tell a story is crucial for every business, but not every entrepreneur has the ability to do it flawlessly from the get go. There are those that it comes more naturally to (Like Steve Jobs) and there are those that need more help and practice.” So are people born storytellers? Can they do it on their own or do they need the help of an actual storyteller? I think both hold true – on the one hand storytelling is ingrained in our DNA and we’ve been doing it for centuries. On the other hand, I’ve seen great startups struggle for way too long to tell their story because, well, it’s hard to talk about our own baby simply and to the point. I personally wouldn’t waste the time or energy preparing taxes on my own – I pay an Accountant. When it comes to a legal issue – if it’s complex I hire a lawyer. I value my time and their expertise. But it’s all a matter of time and priorities. Talk to me to learn more 🙂
Most investors will not read a full blown business plan. Especially at early stages. It might be a waste of time and money to create such a plan so early in the game. You can and should however, create relevant pieces like Market Overview, Trends, Business Model and Competitive Landscape. These are all a vital part of an Investor Deck.
Always have an Investor Deck, a Partner/Customer Deck and a Send Out Deck
This is your main deck which you should start with. It should contain 4 main sections:
- The Problem/Need/Gap – What needs to be solved that hasn’t been solved yet?
- Your Solution – a simple description of your product, a killer demo, the benefits to the end user/s and your traction
- The Business – Market Size/Value, Trends, Go to Market, Biz Model, Competitive Landscape and Team
- Moving Forward – Roadmap (Product and Marketing), Future directions and the Ask
The rule of thumb is one big idea per slide. If the slide is clean, minimal bullets and a visual that illustrates it well then it’s going to do the job. I’d rather see you have a few more slides that don’t look like an eye chart exploded onto a powerpoint than running the risk of crunching too much into a slide…
The good news? It’s also 4 parts and very similar to the Investor deck – with a few crucial tweaks:
- The Problem/Need/Gap – What needs to be solved in their world?
- Your Solution – a simple description of your product, a killer demo, the benefits to the them, How it works (without diving too deep technically)
- The Business – Success Stories, Market Trends, Competitive Advantage
- Moving Forward – If they’re interested – what’s the roadmap? What’s the next step?
You should NEVER send out your full deck to either audience. Ok, never say never, but please don’t. Here are the Guidelines:
- Whittle Down the Deck – Choose 5-8 ESSENTIAL slides to send out – don’t give away everything but intrigue them enough to see that they NEED a meeting with you. (Possible choice for Investor Deck: 1) Problem 2) Solution 3) Traction 4) Market 5) Competition 6) Biz Model 7) Team 8) Ask)
- Add Some Text – While a presented deck should keep words to a minimum because you are there to explain, you must add some text to the slides so they can read a bit and understand a bit more
- PDF It! – Do not let any documents related to your startup out of your computer without PDF’ing first. I’m not saying that a PDF makes it foolproof, but at least you know it’s keeping its format and it will be harder to copy paste chunks
A one pager is a snapshot of your investor deck, done on 1-2 pages. (Front and back) It’s like a mini Executive Summary sent to investors in the hopes of piquing their interest enough to get a meeting.
Pretty much what’s on a send out deck – Problem, Solution, Current Status, Market Overview, Business Model, Competitive Landscape, Team and your Ask. If you can fit it – some screenshots of the product would be nice. Just enough to pique their interest – but save something for the meeting!
No need to go into financial projections or P&L, or too many details about features and plans. Give them just enough to want to meet you. Think of it as an “online dating profile” 🙂
Check out invisu.me for a free, easy and visual way to create a dynamic, digital one pager
A brief intro of yourself and anyone else in the team and then your “Vision Statement”
This is even more lofty than a solution statement – this is your purpose for being or your “Why” as Simon Sinek puts it. This has nothing to do with what you are doing – this is the grand scheme of what you plan to achieve with it. So go big – get them intrigued before you start.
Reid Hoffman says: You have the most attention from investors in the first 60 seconds of your pitch, so how you begin is incredibly important. One common mistake is putting the team slide early in the deck. The team behind your idea is critical, but don’t open with that. Instead, open with the investment thesis. Mark Suster says: Because management is so important I always tell people to make the bio slide the first in your deck. If you have good experience then the VC will be leaning forward for the rest of the presentation. If you save the punch line that you’re from the industry, did CS at MIT, worked for 3 startups, whatever, then they don’t have that powerful knowledge as part of their evaluation set. Who is right? I usually tell clients to start with the team slide if they have notable backgrounds, exits or unique experience that strengthens the credibility. If you are a young, inexperienced team, put it later on, after the business info.
Pictures of the Founding/Executive Team, titles and a few bullets about each member’s most impressive achievements. If there are impressive places they’ve worked, put logos there. This is not the time to do a deep dive into their entire resume! Be brief and impressive!
You can put your Advisory Board on the same slide as the team and also, picture, title and the most impressive places they’ve worked or accomplishments. If there’s no room, give them a separate slide.
My answer might surprise you…Here’s a tough revelation, and I’m telling you because I really care – NOBODY CARES ABOUT OUR PRODUCT/SOLUTION/TECHNOLOGY – unless you can first prove WHY they need it in their lives. I’ve met hundreds of companies over the years, working on their sales or fundraising materials and almost every time they start off by telling me about their product/solution/technology, why it’s great, why it will change the world and proceed to launch into details of the technology. I sit there smiling politely, thinking “Why should I care???” If I was feeling this way imagine what the investors/customers/partners that had to listen to their ramblings were thinking? People are motivated by 2 things:
- To avoid something bad happening
- To make something good happen
It’s the carrot vs. the stick. When telling your story, start off by hitting them where it hurts – the problem! What’s missing in their lives (or the lives of your audience)? What might happen if they don’t take measures? What won’t they be able to live without, etc. They will be so anxious for a solution that they’ll be dying to hear your solution!
What may be obvious to you may not be to others. You have to put yourself in the shoes of an audience listening to it for the very first time. And if you don’t find a way to simply yet powerfully discuss the problem, you are missing a huge opportunity to make the solution seem even more important!
Should I use complex and technical language to impress investors and show that I know what I’m talking about?
Sometimes Founders think that the more high level and jargony their language is, the smarter and more successful they will seem. There have even been those that have said to me: “Any investor that doesn’t get it, we’re not interested in meeting.” Au Contraire, Mon Frere – that couldn’t be further from the truth. Let me make something clear – It is solely your responsibility to make sure that EVERYONE in the room “gets” it, regardless of their background or education. The thing is – when an Investor or anyone listening doesn’t “get” what you’re saying, they will disconnect, disengage and disregard. Most likely, your engagement will end there. Being able to explain your solution simply is harder than rocket science. But so rewarding. You want every person in the room with a spark in their eyes, nodding in agreement. When they get it, they can focus on the important things like your market, your traction and how likable you are. (Yes, that counts for a lot)
Every company must have a Simple Solution Statement. This is the clincher – you want to be able to explain your solution in about one sentence/statement. So try “We are a (tool/solution/platform/app/system) that does X (solves a specific problem) for Y (for a specific audience) by Z (How are you doing it? And this doesn’t mean going into technical details, rather the end result, product, secret sauce)” – if you crack this code – you will be set!
Let’s get something straight – YOU MUST HAVE A DEMO! It is super important to be able to showcase your product. Human beings are very visual creatures and Investors, panelists or audience members need to see what you’re talking about.
Let your demo tell the story of a first time user experience. Use a real customer story, an imagined one or just an overriding narrative that guides them through helping them imagine how easy and cool it would be to use your product. Highlight some cool features (4-6 – no more or it gets tedious) and the whole thing should take up to 2 min.
LIVE DEMOS (often) DIE! I have seen it happen too many painful times. And it’s not just at Conferences/Demo Days/Competitions – it happens at Investor meetings and it doesn’t reflect well on you or your product.
If you’ve already invested in a product film (Which shouldn’t be more that 60 seconds) take the part that shows the demo of your product – 20-30 seconds and instead of the voice over talking, you talk it through. If you don’t have the resources to invest in a Product film, you can create a product demo by capturing your screen. A popular, free and fairly easy to use tool is Camtasiaor if you have a Mac Screenflow. If you have an IOS app you can use Reflectorto stream onto your screen and then record it. (Note – they recently released an Android version but I haven’t seen it in action yet – worth a try!) If you have an Android App, from Lollipop and up there’s a Cast screen feature that let’s you broadcast on any screen. If you are really in a pinch or don’t have a launched product or prototype yet, you can put together a series of screenshots to tell the story. You might want to point out and highlight the features that you discuss. Make sure they look good! Shoddy screenshots=shoddy product in the investors’ eyes. Try InVision – a great prototyping tool that let’s you create great looking screenshots to display as a demo.
Try to incorporate them into the demo to show a few neat features – 4-6, no more or it starts to feel like a laundry list. It’s not about rattling off all the features – it’s making them excited about the cool features and want to really try it themselves!
Again, stick to 4-6. Think of benefits to all your users – maybe you have a product that benefits businesses and their customers? Or publishers and their readers? You can make a list of benefits for both sides. Speak to the benefits that are truly valuable and unique.
It’s important to know your market size (potential customers) and value (what is the total spend per year?) inside and out. Familiarize yourself with 3 terms – TAM = Your Total Available or Addressable Market (everyone in the world who could potentially use your product), SAM = Your Segmented Addressable Market or Served Available Market (Your target market within the TAM), SOM= Your Share of the Market (what chunk of the SAM you will realistically reach within a few years).
To get an investment, your market size and value have to be pretty big so if you capture a very modest share in your SOM = Your Share of the Market, you still are giving them a large ROI.
So how on earth do you figure out these numbers? Well if you can’t afford to take on a consultant, the first obvious place is Google. If you can find data from reports by Gartner, Forrester, IDC, CB Insights or any noteworthy Market Research firm, that’s great! Not all reports are free but see if you can get access through a friend studying at college – they often get free access to databases. Another fairly inexpensive way to “DIY” – Fivver is an amazing marketplace that from $5 (and up) you can hire someone to do research for you. AskWonder is a fairly new contender that is focused on queries – they’re a little pricier. Be VERY specific what you’re looking for and you’re bound to get better results.
Don’t ever fudge the numbers! Find real numbers and their sources – don’t make things up because that can seriously harm your credibility. Try to get as precise numbers as possible, but it’s better not to have them all than to be “creative.”
Look at your competitors – has anyone just been acquired or raised massive funding? That’s great! It can signal to Investors that you are the next hot thing. Is there a quote from a major source like Gartner or Forrester saying that this is the year for a startup like yours? Grab the quote! I recently worked with a company raising their Series B and they had such a quote from Gartner – it was definitely a nice stamp of approval for investors to see.
Numbers are just dandy. But as Reid Hoffman says: “Frequently, young entrepreneurs put in slides that show their business’ total addressable market (TAM) to establish some credibility. Problem is, most investors don’t trust the sources of that information, so entrepreneurs aren’t establishing huge credibility by saying they’ve claimed a market with a huge TAM.” So what should you be talking about? Trends and opportunities! Why are you a hot investment opportunity now and what backs that up? Investors often suffer from FOMO so this should push their triggers.
“Go to Market Strategy” is the strategy of penetration your market. What strategies will you use and how much will it cost you to get each customer to use your product – or your “Customer Acquisition Cost” (CAC) using these strategies. Show that you have done your homework, that you are familiar with your market and know the best strategies to get to them at minimum cost.
By saying “oh our product will go viral” you are basically saying nothing. Videos go viral – some by luck and some by lots of money invested into getting it seen. If you show that you have elements of virality in your product (Incentivizing shares – i.e. share with 10 friends to get a free month) that makes more sense. But there’s a fine balance of not being too pushy when getting users to share.
Obviously you will have less resources starting out so show that you will maximize the early phases with lower cost/higher yield strategies such as social and then later in the game, go for the more expensive strategies like a Sales Team, Trade Show presence, etc. So plot out your phases, your target market for each phase and the strategies you intend to use for each phase.
A great strategy is blogging, putting valuable content out to your followers that spreads your name in a positive way and leaves them wanting more is a great way to gain their trust and loyalty. It’s also relatively cheap. How do you get your content out there? Open a blog on Medium and start posting on all social channels. You can pay for sponsored posts or ads on Facebook which is highly targeted and relatively inexpensive. Facebook Ads are another great way to experiment and get to know your audience.
Growth Hacking has become a popular buzzword, and like many other buzzwords, it’s important to know what’s behind the buzz so that you can provide investors with an in-depth picture of the strategy. Monica O’Hara of DataScore, Growth Hacker Extraordinaire shares her favorite tip:
Finding smart avenues of growth all begins with brainstorming where your target customer ‘hangs out’ online. Do they read certain websites? Are they active on any social media channels or forums? Once you identify where they are, you can put a plan together about how to engage with them. There are some tools out there like ListBuilder.io (LINK) that can help speed up your outreach process. ***
ListBuilder.io is one of our growth hacking tools that helps speed up the collection of email addresses, twitter handles, and other contact information with just a few clicks.
This is a tricky one. You might not have a particular model in mind, or you might have many. You might not be charging (at least at first) for your solution. The thing is, this is not a charitable fundraiser – you need to be able to show investors how they will see a large return on their investment. So think logically – what makes the most sense for your product? Subscription? Ads? Promoted Content? Premium Features? Analytics and Reports? Try to find the best match and then discuss a few possible future revenue streams.
Not really – the “-ium” is really the business model. I suggest saying that the product/solution is free for certain users or a certain level of service but you will charge for premium features or services and detail a few that seem like something people would be willing to pay for.
We don’t intend to charge money for our product at first – should I still talk about our business model?
Yes! Investors need to know that they have the potential of making my their investment many times over. It’s legitimate to say that you are focused at growing your user base at first so it’s free with the understanding that eventually there will be a subscription or licensing fee, ads or something that will make you money. Remember, investors want to see a product that is so good that people will be willing to pay for!
The first meeting is like a first date – give them just enough information that they want to follow up for a second date or send you an email asking you for more details. So while you should have financials and unit economics for the first year or 3, don’t put it in your deck up front – let them ask you for it. At early stages, it’s pretty much guestimating anyway…
The most important thing – keep your cool, breathe, count to 10 and then answer a difficult question. Remember – they are watching to see how you deal with challenging questions even more than the answer! Having competition is a great thing really – you just need to be able to identify what truly sets you apart from our competitors. Group them into 3-4 types, explain briefly what each type does with a few examples of the main competitors and then say how you are different/better/doing more without bashing your competitors 🙂
Definitely show, don’t tell. Martin Zwilling, an Angel Investor stated in a recent article that “Every investor hates those large competitive analysis tables filled with check marks and red dots.” So do I – it makes my eyes bleed. You want to have a visual that explains it at first glance. Here are 2 good options:
- The “Magic Quadrant” – a graph attributed to Gartner shows how you measure up to competition based on 2 main differentiators.
- The “Petal Diagram” – Steve Blank, a Lecturer at UC Berkeley looks at a different approach: Where your startup is at the center of several markets that each touch on a specific aspect of your solution, but you actually encompass all of them all. There should be only about 3 top competitor in each petal – this is a good representation without over-crowding. You don’t have to have 5 petals – even 3 is enough – it’s a great way to solve the conundrum of having more than 2 metrics to measure your uniqueness by.
Don’t be alarmed by a question like that, the secret is to build on your competitors’ success.If a competitor of yours just was acquired or received major funding, use this to show how hot the market is, hint that you might be next because you have a secret sauce that they don’t and make them feel that they could be missing the opportunity of a lifetime. No Investor likes to feel that they missed out on the next big thing. For example, I had a client building an Enterprise solution that had 3 competitors that were acquired by Gartner in the past 12 months. That’s a pretty big signal that if he could prove his capabilities that he might be snapped up by a Gartner competitor.
Know your Landscape Inside and Out! Look under every tree and rock to find who your direct and indirect competitors are.
Direct means they are doing something very similar to you and targeting the same audience. indirect meaning they still touch on your target audience but solve their problem in a different way. For example, VRBO.com is a direct competitor of Airbnb but Craigslists is an indirect competitor because they also offer short term rentals but don’t have the whole ranking and payment system in place.
Don’t ever say anything bad about your competitor – you don’t know who might be sitting in the room that’s an Investor/Board Member/Mentor of one of your competitors. It also reflects badly on you that you have to trash your competition to aggrandize yourself. Always say something like – “What Competitor A is doing is ABC, we do ABC plus we have a magic dose of XYZ…
If you are raising enough funds for 18 months, make it an 18 month roadmap, and so forth.
The major milestones you will hit in both product development, marketing, revenues, etc. in the amount of time that your runway will last. (12, 18, 24 months, etc.)
If you have an additional market, product or feature that will grow your reach and revenue potential significantly, but it’s down the road, save it for right before the ask. That way you sweeten the pot with “one more thing,” Steve Job’s style, and give them one more reason to be excited and want to keep talking.
If your current product is just the first in a much bigger picture, you can put a future directions slide just before the ask and talk about it there. I also recommend that you start with a vision statement at the very beginning – the bigger vision of what you will do and why you’re doing it.
Um, do you want an investment? That would be yes! 🙂
Seeking $XXM to be used for: and then 4-5 allocations like R&D, team expansion, sales and marketing, 3-4 pilot customers, or whatever is relevant to you. Then end with a round objective where you state where this money will bring you to.
Try to ask for a specific amount from a specific investor, otherwise it can be too confusing. You can ask for a chunk of a bigger investment that will help you get to a more advance Round.
In this deck not too detailed, 4-5 main allocations is enough. If they are interested they will ask for a much more detailed use of funds.
How long this Round will last you for (your “runway”) and what will you acheive, such as how many users? How much revenue? Break Even? Profitability? How many locations? Etc.
Goodness no! What if they want to give you a higher valuation? Or what if you’ve shot too high and it puts them off? Let them ask you about a valuation, try to politely evade the question, but have a decent number in mind if they really want to know. They will put a number in a term sheet anyway.
No no! Never volunteer your Valuation or Exit Strategy. And definitely don’t put them on a slide! Rob Go in a great piece he wrote for Techcrunch said that the market will dictate your valuation anyway – and you should wait to talk numbers, first get them interested and excited and then later you can go for a higher valuation – not too shockingly high – and if you get pushback you can always backtrack.
Regarding Exit Strategy, Gordon Daugherty suggests a response: “Our top priority is to build a world-class company that is growing and increasingly profitable over time. With that we’ll have infinite options. At some point in time, one of those options might be an acquisition or IPO exit…But we’re not spending energy now modeling various exit options because refining our plans to double our revenue in the next 12 months is far more important. Essentially, our exit strategy results from building a great company.”
Don’t make it up on the spot. Credibility is so important when building a relationship with an investor. You can say that you don’t have all the information here, can you get back to them with the full answer. Hey, gives you an excuse to continue the conversation!
Make an Extensive Question List – List all the questions you’ve been asked, you are pretty certain you will be asked and that you dread being asked (i.e. Exit Strategy, Technological Barriers, Competition, etc.). Make a shared Google Drive document with your team and keep adding questions as they come up.
- Categorize the Questions – Group questions by topic – Financials, Marketing, Team, Technology, etc. to make it easier to reference them.
- Answer the Questions – Write down answers to all of the questions until you feel comfortable answering them. No need to memorize them, just familiarize yourself with them.
- Review Before the Pitch – Just like you’d be looking over your pitch before a big event or meeting, look over your Q & A. No need to memorize the answers, just know them well enough that it feels very natural to discuss difficult topics.
The Elevator Pitch is a pitch that could be given, well in an elevator. I coached the pitches for the Elevator World Tour where 100 startups get the opportunity to pitch investors in an elevator competing for a sizable cash price. This has taken place in Paris, Toronto, Tel Aviv and more – and always in a very tall building where the time from ground floor to top and down again was an average of 1 minute 26 seconds. So for me that’s a good rule of thumb – have about a minute prepares with room for about 30 seconds of Q & A.
The Problem you are solving + Your Solution + Some staggering fact about the market or something amazing you’ve accomplished. That’s it! The hope is that you will have grabbed their interest and now they are intrigued, asking questions and continuing the conversation.
This is what usually happens at a Networking event, people milling around, chitchatting and the phrase “so what do you do?” is the star of the evening. Here you have about 20 seconds to grab them.
Here’s the beautiful part – THE SAME AS AN ELEVATOR PITCH! Problem + Solution + Intriguing fact – but condensed. And no – it’s not your Elevator Pitch at warp speed, it’s a shorter, yet powerful version.
Imagine that you were at a conference and you see Mark Zuckerberg walking past you and you have the perfect company for a Facebook acquisition. Zuck’s not going to stand around waiting as you hem and haw – you have to give him the bottom line up front – the hook. What does he stand to gain by associating with you? I would create about 6-7 different “Eyeblinks” and have them ready to go at a moment’s notice to the right person.
A 5 minute pitch is usually done for a Demo Day or competition. It’s not about squeezing all of your Investor deck into 5 min, it’s telling a story and giving a memorable show in 5 minutes. It might seem like a daunting task but if you get all the ingredients right you’ll hold a powerful tool in your hand. The flow you should have – 1) Introduce yourself, your company and your brief “vision statement.” (~10 secs) 2) Tell the story of the problem (~30-60 secs) 3) Give a “simple solution statement” (we do X for Y by Z – ~10 sec) 4) Show a powerful demo that highlights around 4 key features (~45 – 60 secs) 5) Current status and achievements (~20 secs) 6) Discuss 3 main aspects of the business: Differentiation (from your competition), Monetization and Market Trends and Opportunity (Why us, why now?) (~1 min) 7) Team (what assets do they bring to the table) (~20 secs) 8) Inspiring Ending (end of the opening story, quote, future directions, bigger vision, etc.). (~20 secs) If it’s appropriate – what you’re asking for.
The best way to get a warm intro to an investor is through someone they know and trust – preferably a Founder they have already invested in. so if you’re asking someone to stick their neck out to introduce you, make their lives easy by having a “company blurb” – a brief paragraph or 2 simply explaining what your startup does to pique the interest of the receiving party
Use the classic elevator pitch format of problem – solution and an exciting tidbit about an accomplishment or the market. Don’t just send a generic, technobabble paragraph that they would have to read 5 times to understand – make it interesting, make them curious enough to want to meet you. Oh and be kind to your intro’er – write in 3rd person so they can easily copy and paste the blurb into their email without having to rewrite the “I’s” and “we’s.”
Any way possible 🙂 Some investors respond to cold emails, others ignore them. Some go to accelerator Demo Days, some sit on panels for pitch competitions. The best way to get introduced to an investor is through a trusted person in their network: another investor, a consultant like a lawyer and best of all, a founder they already invested in.
Check out their website, their blog, their podcast – whatever you can do to learn about them and their investment thesis. And most importantly – check out their portfolio – you can see what portfolio companies you complement and if there are any direct investors. If there are – you don’t want to meet with them. They will not invest in you and you might end up divulging valuable information to a competitor. DO NOT go unprepared! Be ready for a question like “Why do you think you are a good match for me/us?”
It’s very important to follow up after a meeting, not just because it’s the polite thing to do, but because Investors are busy people and believe it or not, you aren’t the only thing on their mind. You have to be persistent! Elizabeth Yin, Partner at 500 Startups writes that as an Entrepreneur she was afraid of bugging Investors too much but as an Investor she is so busy that she often doesn’t notice when someone has pinged her 3 times. She suggests to follow up when you say you will, then if you haven’t heard back, follow up within the week (about 3-4 days later) then about 3-4 days later. And always have a call to action so they know what it is you want them to do!
Have a follow up email template created and in your canned responses on gmail (read how to set it up). You can have a canned response called Follow up 1, Follow up 2 and Follow up 3. (After 3 I suggest adding them to your update newsletter list) the follow up email should (subtly) answer these questions:
- Who are you and when did we meet?
- What were a couple main points we discussed during the meeting?
- Something you acknowledge or are grateful for in the meeting?
- What’s your suggested next step?
- Why I should do it/What’s in it for me? (here’s the place to create what Yin calls (credible) “urgency”- you have a Demo Day coming up, you’ve had second meetings with several investors, you’re raising a smaller note and there’s X space left, etc. Don’t say you’re about to close the Round unless you really are!)
“Investment Season” is classically 2 times a year – January – June and September to December. It’s pretty pointless to try to reach out to investors in December, July and August. So make sure you use those down months to prep your materials so you can start investment season at your best!
You will hear different answers from different investors, but it all boils down to 3 things – Credibility, Likeability and Momentum.
Prepare yourself, practice not just the pitch but also the Q&A, find a way that presents your team and their assets in the best light and most important – NEVER EVER pad your stats and numbers or make up things about your accomplishments. These are things that they will check up on and if you are caught in a fib, you will not only not be invested in by them, they’re bound to pass the tip on to other Investors…
They don’t know that you got 2 hours of sleep because you had a major bug, that you say in traffic, that you fought with your partner – as far as they’re concerned – you are the person that walked in the room. So leave all your crap outside and the second you walk in the building be your most charming and pleasant. Good handshake, smile, eye contact go a long way. Be you, at your best.
Don’t cut them off – DON’T argue with them – I’ve seen it happen and it’s not pretty. If they put you on the spot don’t attack, breathe and show that you can take the heat – that’s part of the reason they ask tough questions, to see how you are under fire. You want to be the kind of person they’d be happy to invite to a 4th of July picnic or a Superbowl box. So be you, at your best. And most important – NEVER EVER pad your stats and numbers or make up things about your accomplishments. These are things that they will check up on and if you are caught in a fib, you will not only not be invested in by them, they’re bound to pass the tip on to other Investors…
This is the proof in the pudding moment. How have you proved that you are a worthy investment opportunity? Do you have users? Revenues? Have you hired stellar talent? Do you have impressive names on your Advisory Board? We’re talking measurable things that they can actually track. Mark Suster goes on to say that: “Everyone has their own definition of momentum (user numbers, revenue, channel partners, biz dev deals, whatever). But the reality is that this nebulous term people talk about that they “need to see traction” really just means that they’re not ready to invest in your company. Why? Chances are they don’t know you well enough and can’t judge your performance or capabilities…So that’s why I tell all entrepreneurs that if you want to raise money from VCs you should see them early. If I see your alpha product then I can judge how it develops over time. If you have 2 developers and the next time I see you it’s a team of 6 with a new head of products I can see momentum. If you have beta customers, new pricing plans, different positioning, more market insights, good press coverage — whatever — these are all signs that the ball is moving forward. And it is that momentum that is easier to judge than a single data point.”
Whatever stage you meet investors at, show how far you’ve come, what you’ve managed to do with minimal resources, who thinks you’re great – Customers? Advisors? Your Mom is great but she won’t hold much weight with investors…