Investor Presentations, Part 2: The Nine Rules for Making Your Pitch
Per Part 1 of our musings on Investor Presentations, writing your investor presentation is actually the easiest part of raising funds; giving your presentation to investors is the first place where the battle is won or lost. The best Investors have sat through hundreds of presentations and have pretty much seen it all. Plus, they are intellectually curious, like to get to the point, and often take perverse pleasure in testing the composure, verbal skills, and subject matter expertise of presenters. And they do all of this in a completely non-threatening way. There are nine rules for ensuring the success of an investor presentation:
1. Go as a team – In general, 2 (or maybe 3) senior executives from the company should attend and participate in an initial investor presentation. Every attendee from the company should have a speaking role that is scripted in advance, when possible. The CEO runs the presentation. Another executive may present slides in areas where he is particularly strong. For example, if you have a strong technology executive, he ought to deliver the product and technology slides. The CEO typically closes out the presentation. Note that, since you have to run a business in addition to raising money, you may not be able to corral your best presenters for every meeting. Therefore, the top three to five executives in the company should be fluent with the presentation.
2. We’re talking about practice! – When it comes to investor presentations, practice is important – both with your team internally and in front of “softball” audiences. Internal practice helps you smooth out your rough edges. It enables you to see your team members in action, and it gets everyone on the same presenting page. In “softball” presentations, groups of fake investors can listen to your presentation, ask you the toughest questions possible, and critique both your presentation content and skills. Often, these “softball” presentations are much tougher than the real thing. Hopefully, through “practice,” you can formulate good answers for most of the questions that investors are likely to ask you.
3. Stay on task if at all possible – Many investors love to pummel entrepreneurs with questions throughout a presentation. Frequently, these questions don’t pertain to the slide that is currently projected on the screen but rather address issues that will be covered later on. It’s the mission of the CEO to keep investors in line. Remember that your presentation starts with a short explanation of what you do and an investor highlights slide that outlines the key themes and content of the presentation. By spending two minutes setting the agenda up-front, you can avoid presentation chaos later on. There are some investors who like to engage in very free-flowing discussion and will destroy your presentation early on no matter what you do. In that case, you have to roll with it. Try to deliver answers that mirror the content of the slides. Even though the meeting may seem disorganized, you want the investors to remember your company in an organized way. Here's one other lesson:
When you're presenting, don't read your slides; most investors have very high reading levels. They read fast, too.
4. Answer all questions – It is impossible to have the answers to all questions at your fingertips. You need to write down and respond to all information requests within 24 to 48 hours after the meeting. You should deliver detailed, fact-based answers via e-mail and, if requested, over the phone that will demonstrate both your mastery of your business and responsiveness.
5. Watch the time – You will have 60 to 90 minutes to present your story – and sometimes less if the investor is crunched for time. You need to keep your delivery snappy, and you need to get to the heart of your presentation – the market, products, and go-to-market – quickly. It’s not necessary that you finish your presentation, but investors should have a good understanding of how you operate your business and how you plan to be a leader in your market.
6. Make it printable and hand it out – Even if you use extensive animations during the actual presentation, make sure that you have an attractive, printable version of your deck. Investors should have copies in print and electronically at the close of your meeting. It’s your choice whether to hand out the deck before or after the meeting. Before means that you’ll run the risk of encouraging those “read ahead” people who can create presentation chaos. After means that an investor will be taking notes on a pad of paper instead of on the printed copy of the presentation – so, later, she will be going to multiple places to remember what she thought of your presentation.
7. If you don’t have a glitzy product to show, consider just talking off the printed deck instead of doing a stand-up presentation – Certainly, it’s important that investors like your business idea and prospects; it’s equally important that they believe in you personally. Some entrepreneurs are better at presenting by discussing things across a table as opposed to pitching with a lit screen behind them. Use a presentation style that makes you comfortable; you’ll do a better job, and investors will think more of you as a leader of the next, new thing.
8. Nail down the follow-up items – At the end of your session, you need to make sure that you understand the follow-up actions that both your company and the investors are expected to take. Get the dates for when things need to get done, and make sure that you catalog all information requests from the investors. We would recommend bringing a due diligence thumb drive with all of the appropriate follow-up documents in case there’s a need for speed at the end of the meeting.
9. Finally, don’t change your deck after every meeting based on limited feedback – Not every meeting will be a home run, and some investors will be quite caustic in their commentary. Our strong advice is to give your presentation 5 to 7 times before making any major changes to the slides. You need to listen to the pattern in the feedback rather than the feedback of any single investor. In addition, the quality of your presentation delivery should improve as you give the presentation more times.
This leads us to one last piece of important advice:
If you have the choice, don’t start with Kleiner-Perkins out of the gate. Schedule the most attractive investors for a little later in the cycle after you have been in the market for a few weeks and your presentation engine is finely tuned. At the end of the day, it’s all about the combination of your market and business idea, your presentation (and other documents), and, most of all, the performance put on by you and your team.