How to present to Investors
Presenting to Investors needn't be overly daunting if you have done your homework, thought about what you want to say and are prepared for the obvious questions that they will ask.
I've put together 5 top tips to make that investment presentation go well and increase the likely-hood of getting funding.
1. They are investing in you.
How you stand, what you wear, what you say, how you say it, all impact the Investor, whether they are actively noting it or not. Even if you normally wear jeans at work, my advice is to wear a suit or smart office wear. Not over dressed, but definitely business-like.
Practice what you are going to say ahead of time and listen to yourself (even just listening in your head, without a recording can help). Don't fall into "Um.. I'm here to ..erm present to ..um you ..an exciting um..."
Don't stand with your hands in your pockets, shuffling or pacing about. Appear relaxed (even if you're not), if there is room, slowly walking to one side to illustrate a point or move forward to show interest in a question is fine and better than standing rigidly at attention. Don't fold your arms over your chest - it's a defensive gesture. Don't jab your finger at the Investor while debating a point - it's aggressive. Easy eh?
Be likable, enthusiastic (without going over the top), modest where appropriate and confident in the areas that you claim are your expertise. It's a difficult balance, but the Investor will need to believe that they can work with you and yet that you have the drive and authority to do what you say.
2. Presentation equipment.
Check ahead of time what is expected. Are you to do a short verbal pitch or allowed to set up your laptop to do a more formal presentation, if so will there be a projector? Assume nothing, always check. Many business angels prefer a simple short pitch of the main points.
3. What to include.
This isn't a definitive list, but if you've covered these items you're ahead of the game:
- Introduce yourself & any other attendee.
- Give the business name and give your one sentence description of what it does.*
- Say why you are there (ie We are looking to exchange equity for £xxx funding to enable us to ... meet all the orders we have received ...grow the business ...increase our market penetration etc.)
- Management Team and why their experience is relevant.
- Briefly (!), where the idea came from, or if established, the history of the company.
- The product or service that the business centres around.
- The market for the business (size, demographics).
- Operations. Where based. How resourced or manufactured. Supply chain, how delivered.
- How it will be sold and marketed - important, yet often the most sketchy and glossed over.
- Finances - Not complex accounts, but the bottom line. How much the business has already turned over, will turn over this year, next couple years. The profits to be made. What the funding will be used for. What money has already been put in. Who owns the company. Any loans outstanding. Give an idea of what equity you are prepared to give up. - - Tell the Investors what the Exit Strategy for them is. Have much more information ready, maybe as separate spreadsheets you can refer to on every aspect of finance so you can answer any questions.
- Summary - (repeat the one sentence description, add the "hot buttons" of profits to be made and what the investors will get out of it and what you are looking for. Don't make a meal of it, this can be one flowing sentence or two - no more).
You can see from the above that there is a world of difference between having an "idea" and having a well researched and thought out plan. Those with just an idea can talk all day about the product or service, but haven't addressed any of the practical aspects of how that idea gets implemented or proving that it will sell.
4. What the Investors want to hear or see (ideal situation).
- Presentable, pleasant, ambitious, good energy, knowledgeable, articulate presenter.
- A Management team that has done exactly what is being proposed, before and was successful at it.
- Three to five year exit strategy (can vary).
- The funding will be used to make the business worth more than it is worth today ie growth
- Great returns for their investment (multiple of 10 at least).
- Lots of evidence to back up what is being said / claimed by presenter.
- A business that can rapidly grow and has potential to be replicated.
5. What they don't want to hear or see.
- Aggressive, argumentative, know-it-alls. Or stumbling, incoherent and listless.
- I need the funding to... pay off my debts ...pay the directors a wage.
- Hockey-stick shaped unrealistic sales/profits growth.
- Claims and bold statements without evidence (ie "a unique service with no competition that will..." - they've heard it all before!).
- Unrealistic company valuations and equity for funding expectations.
- "Life-style" businesses ie. one that provides a comfortable living, but little chance for dynamic growth.
- Hiding things, refusing to answer a question, or bluffing.
* If you can't say in one sentence what your business does, then you stand very much less chance of gaining investment or help. Yes, the market may be complex, your differentiation deserves explaining and the product or service amazing - but it must still be distilled to one sentence
That's all there is to it! Good luck.