“You should have seen the look on Gill’s face,” Barry, the Chairman of the Board of my company said to me. He was telling me about sitting in on a pitch to Gill’s, our lead investor, fund.
“Gill gave me this look about five minutes into the pitch,” Barry said, laughing. “He just wanted this thing to end because it was a waste of his time.”
The reality is that most CEO pitches fall flat. But your pitch doesn’t have to fall flat. Here are some steps you can take to make sure your pitch will be a success and you can impress investors.
Before your meeting:
A. You should rehearse your pitch.
There’s nothing worse than watching a CEO that’s given a one hour time period to pitch run out of time. There’s just no excuse for that. Ever.
Great CEOs never run out of time because great CEOs rehearse their pitch over and over again. Let’s say you have a one hour meeting with an investor, but the investor only has 30 minutes. What will you do?
A great CEO already knows how to handle this event. The slide deck is seamlessly reduced to fit the new constraint without feeling rushed.
The reason the CEO doesn’t feel rushed is due to all the practice. If you’re just starting out, rehearse and, literally, use a stopwatch to time your presentation.
B. You should always have a hard copy back up just in case.
My business partner, Cathal, and I had to fly out to New York to meet with some investors who were planning on investing about $80M based on our recommendation. We had a slide deck ready on our computer, plus we brought a thumb drive with the deck, and, just in case, we had hard copies of the presentation too.
We got to the investors office about 15 minutes early. To our horror, we couldn’t connect either of our computers to the screens the investor had installed in the conference room.
Thank goodness we had the back up hard copy of the deck. We walked the investors through our pitch using the hard copies we had printed. The deal was closed a few days later.
C. You should show up 15 minutes early.
You never want to be late to an investor meeting. With traffic being what it is, you never know if you’ll be delayed.
So plan on getting to your investor meetings 15 minutes early just in case. If you have a longer distance to travel, you may want to increase your buffer.
Then, set up your slide deck ahead of the investor(s) getting to the conference room. That way, you’re prepped and ready to go.
D. You should only bring team members that will add value to the meeting.
I’ve sat through pitches where it takes over 20 minutes to get through introducing your team. Talk about a rally killer.
You’re going to be dominating the talking during your pitch because you’re the CEO, but you might need your VP Engineering to help explain the technical side of things. Or maybe you need your VP Sales to help explain the customer issues. But you likely don’t need your whole management team.
Remember, your goal is to raise money, not to appease the egos of your cofounders and executives. That means you might need to leave a few people back at the office.
During your meeting:
A. You should get to the point.
You have such a short time to hook your audience, maybe seven seconds or less. In that seven seconds, a great CEO is able to tell investors everything they need to know, so they can get excited about investing in their company.
That sounds like a magic trick, doesn’t it? But it’s not. A great CEO will explain what their company does, why they are better than the competition, make an emotional connection with the audience, and how big the opportunity is in seven seconds or less. Now the CEO has investors hooked.
B. You should know your numbers.
I was speaking with a CEO about his company. He was preparing to raise his next round of funding.
I asked “Larry” how much money he wanted to raise. Larry said, “I’m not sure. Maybe $3M to $7M.”
Larry’s not a great CEO, yet. Knowing exactly how much money you need to raise is part of being a great CEO.
In fact, let me go one step further. You should know how much money you’ll need not just for this round of funding, but how much you’ll need for the life of the company.
Yeah, I know that this is your best estimate based on your knowledge today. That’s okay. Investors understand you don’t have a crystal ball. Here are some more numbers you should know:
- What is your monthly revenue?
- What is your estimated revenue for the year?
- What is your break even revenue?
- What is your current burn rate?
- When will you hit cash flow break even?
C. You should follow the rule of four.
The CEO was wearing a polo shirt and he sat down in the middle of our big conference room. There were about 10 of us from the fund in the room with him.
The CEO didn’t stand up like the other CEOs I’d seen present did. Instead he stayed rooted like a plant to his chair.
That was the first thing I noticed about the CEO of this long forgotten company.
The CEO had forgotten the rule of four. What’s the rule of four? Easy, you stand up and present from the front of the room if there are more than four people in the room. You want to command your audience’s attention, and it’s much easier to do it in a large group setting when you are standing.
And no, this CEO didn’t get funding from us.
D. Have your backup slides prepared.
“Do you know what really impresses me?” “Donald,” the head of Donald Ventures said to me and the 100 other CEOs in attendance at his annual CEO summit in Tiburon. “A great backup slide deck. There are always questions your slide deck can’t answer. But if you have the answer in your backup slides, then that’s great because you’ve closed the deal.”
I nodded my head in agreement, and I made a mental note that I needed better backup slides before I raised my next round of funding. Now, truth be told, I was not a big fan of Donald.
But his thoughts about backup slides resonated with me because you’re right there in the room with the investors. If you can answer their question right then and there, you’ve got a much better chance of closing the deal.
After your meeting:
A. Promptly follow up any investor requests.
You knocked it out of the park during your investor meeting. That’s great. The day after your meeting, you receive an email from the partner asking for several documents.
You play it cool and wait three days before you send the information to the partner. That’s what’s called snatching defeat from victory.
Ideally, you want to respond in the same day, or worst case within 24 hours, to any requests an investor has. That’s how you keep the investment moving along.
B. Be a polite pest.
Sometimes, due to the fog of email and life, you don’t hear from an investor. Sometimes, a non response has nothing to do with you.
But, every once in a while, an email is missed or lost. Don’t be afraid to politely follow up.
My favorite line is something like, “I’m not sure you received my response to your question…” You get the idea. However, don’t send emails every day to a potential investor or you’ll appear like a stalker, and that can cost you an investment.
C. You want to make it really easy to work with you.
Raising money is the ultimate in sales. Great sales executives know how to make the sales process as frictionless as possible, and so should you.
Make it really easy to work with you. The easier it is to work with you (using all the tips above), the more you will stand out and impress investors, and that makes it more likely it is you will get an investment.
For more, read: https://www.brettjfox.com/can-you-ever-lie-to-your-investors