The promise of an up-coming investor meeting brings with it the potential for an opportunity for your burgeoning business—any such short meetings could be the ultimate difference between the concept you've been building and a full-fledged company.
But an investor meeting isn't just about optimism. Alongside the upcoming meetings comes anxiety, stress, and the overwhelming need for extensive preparation. Herein lies the question every entrepreneur should be asking themselves weeks before that first exciting but heart-stopping meeting—are you ready for your first start-up investor meeting?
If you find yourself answering that question with a resounding no—don't panic. This article was constructed to bring you the must-know tips, advice, and inspiration you need to prepare for your upcoming meeting.
The Must-Know Steps for Preparing for a Start-Up Investor Meeting
We want to lead in with one important disclaimer. Seldom does a single meeting nail a deal. It is a process of building acquaintances and trust between the investor and the founders. As such, don't try to fake it. It's better to be genuine and share your passion while explaining why you're doing it, what do you see in the market that others miss and how you can build a business around your idea. Remember, you are not there to prove you are the smartest person in the room. The investor assumes is that you know more about the business and market. In any other case, they'll probably not invest with the caveat of experienced investors looking to invest in early-stage companies to incubate them and mentor them.
Research Your Investor Thoroughly
While that might seem challenging, you should do your best to get to know the investor as profoundly as possible before you meet them, or rather, before you even reach out to them. You need to consider:
- What is their background?
- What is their investment strategy? Early-stage lead angles? Growth rounds?
- In what fields do they invest? e.g., Consumer cosmetics vs. enterprise IT
- Do they invest in specific types of companies or business models? (e.g., SaaS, marketplaces, e-commerce)
- In which companies and founders have they already invested?
- Why does it make sense for THEM to invest in your company?
- What do the investors care about and why?
You can learn a lot from PR announcements, Linkedin and Crunchbase. If you feel this investor has a perfect fit, it's worth it to reach out to founders they invested in and get their input and feedback on the investor and process. As you don't know those founders, if they do agree to meet you, do not ask them to introduce you as you won't know if and how such intro would be made. Nevertheless, if you impress said founders, they might offer an introduction, in which case you should certainly leverage it.
Ready Yourself and Your Team Extensively
Even for very early-stage companies, there is some teamwork in preparing for an investor meeting, and in many cases, more than one person from the company's side would attend such a meeting. Some of the material might be prepared by different team members, and you might decide to go with a shared presentation (there are pros and cons to each).
Having all these document and stakeholders from the company side create challenged. First of all, all the investor material, including the executive summary and investor pitch deck, are expected to be cohesive. If those were based on a business plan, marketing strategy document, financial forecast, or any other external document, they need to reflect the same data. Moreover, they need to have the same design, messaging, and tone.
The other part is the presentation itself. If you plan to do a shared presentation, consider how you keep the transitions natural and fluid. Don't aim for an even amount of time presenting. One person can lead the whole pitch while the others can offer support for deeper technical or marketing specific questions.
All of this requires a lot of coordination. While the company's CEO will be viewed as the owner of the process, the team interaction, chemistry and cooperation will also be scrutinizing. Avoid bringing any tension or ego games to such a meeting and prepare as a team.
Collect Important Documents and Create a Pitch Deck
Gather up and collect every crucial document to help construct your pitch deck. Include essential things like your company's narrative, market opportunity, team information, financials, metrics, and beyond.
You'll want to pull together everything—your financial statements, business plans, FAQs, liabilities, assets, etc.— to combine them in a cohesive, compelling pitch. Because there are many documents, make sure there is no contradicting information across them. There is little chance that any of these inconsistencies will be brought up in the meeting, but the meeting is only the relationship's beginning. If the investors like to progress, they'll likely ask for said material, and if they hit those inconsistencies without you in the room to explain the difference, it might cause some lousy impression. Of course, a small minor difference would not matter. Still, a significant difference, such as sizing the market differently, or many small differences, might cool the investor off into looking at other opportunities.
Practice Your Pitch Over and Over
One time through your presentation isn't nearly enough. Not even close.
Once you have your presentation written out, practice it repeatedly until you can recite it in your sleep. Consider adding virtual aids, slide shows, and other presentation tools to help drive that presentation home. Practice with these tools and practice without them.
Know your material well enough to withstand anything that might interrupt you, like an errant question from an investor, an unplanned disturbance, and beyond.
Ultimately, you'll want to know your presentation so well that nothing will be able to rattle you. While you may plan your presentation as a linear storyline, you might not get the opportunity to deliver it as intended. The investor might not be ready to sit through it all and ask you to jump around to the parts they are more interested in or feel that are at a higher priority. You should be able to both keep your composure, cooperate and be a good sport about it. Don't take it as disrespect of your preparation, but rather a simple numbers game. You will meet dozens of investors to secure an investment, but a professional investor may well meet hundreds of entrepreneurs for any given investment.
The company and the team are one
In mature companies, there is always a discussion about brand and company culture. It makes sense to try and maintain it across thousands of people and dozens of remote sites. In a start-up – there is no difference between company and team. If you arrive ill-prepared, a well-designed deck won't help you shine. Arrive all suited up with leather bounded foldered business plans (a complete exaggeration, but can you imagine it?), and the investors won't buy you are creating the next Facebook, simply as the latter was created by dorm dwelling, hoodies wearing college dropouts. You need to be genuine for good or bad and consider what you reflect as a team. The proof is in the pudding. If you show the investors something they like and chemistry with them, they will invest. Also, consider that not all investors are looking for the same kind of relationship in all cases. They might view some as colleagues, others as mentees, and some as gods. Well, if they invest in Elon Musk, they might.
Be In-the-Know About What You Need
Coming into the meeting with a solid grasp and foundational knowledge of your investors is essential—but don't focus so much on them that you forget what you need. It's on you to determine what to ask of your investors. It's up to you to understand your bottom line, to know what to offer them, and to be knowledgeable on whether or not to walk away.
In other words, don't come to the meeting without a firm proposal of what you'll need. Know your dollar amounts, your ideal sums, your bottom lines, and what's reasonable as far as equity splits go.
When preparing for this part, take time with your team to do the math and discuss it. What's the bottom line for you? What would you accept as a Plan B if your Plan A doesn't work out? A fun drill is to watch past seasons of Shark Tank, pausing and role-playing the negotiation before seeing how it played out.
Rehearse with an Aggressive Audience
Though most investors aren't rude nor hostile, it does pay off to rehearse your proposal and presentation in front of a, particularly aggressive audience. Your investor meeting will be packed with understandable, genuinely interested people who aren't on a mission to grill you in the best-case scenario. But truthfully, you need to be prepared to answer every question they throw out—in any tone used.
Encourage your practice audience to ask tough, aggressive, and out-of-the-blue questions you didn't get ready for them. Make sure they're willing to get on your nerves, push your buttons, and on-board with trying to stump you. You'll need to be able to answer questions from every angle in your actual meeting, and it pays off to know how to remain calm and collected under substantial pressure.
Learn From Criticism
Most probably, you know your business and market better than anyone you'll meet. The fact that people outside your company have a different opinion should not sway you from your path. But this does not mean you should ignore feedback. Instead, you should invite and embrace any input. Form advisors, accelerators, mentors, existing investors, and even friends (while weighing in their experience in your field).
Try to see it from their perspective and shift away from yours. Especially in the start-up stage, entrepreneurs tend to hunker down in a focused mode, but doing so costs losing the broad perspective provided by an external viewer. They might see something in your blind spot, or they might be blind to something that you see but could not efficiently highlight to them.
Remember – it's all about the next step
Since a kick-off meeting with an investor is just the first step, consider it an opportunity to present the investors with yourself, your team, and your idea. The goal is to get them interested. Not to get them to buy-in into the whole thing in a single session. Keep them engaged through the meeting and encourage follow-up discussions and meetings. Any follow-up will serve you.