This video emphasizes the importance of researching investors before a meeting to build a personal connection. It suggests understanding their background, hobbies, and interests to find common ground beyond just the pitch deck.
What this video covers
The first thing is that you really want to do the research here. Before you enter into that room with the investor, you want to know the hobbies that they’re into, the skill sets, the experience, the expertise, where they’ve worked in the past, and have a clear understanding on the background of this investor because here is the thing: at the beginning, it’s all about that personal connection rather than you entering the meeting room and shoving your pitch deck down the throat of the investor, you need to have that personal relatedness, that meaningful relationship that you can start to build there because, ultimately, investors want to invest in you.
They want to invest in your business, too, and help you build it, but they need to like you. With that being said, you want to understand what they’re tweeting about, what groups they’re a part of on LinkedIn, and things where you can find a common interest that you can go over during your meeting at the beginning.
Next, you want to make sure that you have your pitch deck in place. You want to have those 15-20 slides that you can showcase to the investor.
Also, when you’re meeting in person, you want to make sure that you have a pitch deck that is a little bit more visually oriented with more visual appeal to it, versus the pitch deck that you would be distributing via email, which has a bit more information.
Essentially, you can actually use the pitch deck template below that founders are using all over the world to raise millions. I think you will enjoy using that pitch deck, so you don’t start from scratch.
Next, you need to be ready to be challenged. The investors are going to challenge you. They’re going to challenge your assumptions. Those are people that are speaking with your competitors, that are already doing research on your market, on your segment, and you need to be authentic.
Don’t try to make stuff up. If they’re asking you a question that you’re not sure about, don’t make it up on the go. Just say, “Thank you so much. If it’s okay, I will follow-up with you on that.” Later in the day, you send them an email, and you thank them for their time, and you also add whatever that question is around numbers that you didn’t know on the spot and that you want to follow-up with.
Again, you need to know your assumptions; you need to know your projections, your numbers over the course of the next three to five years, and be ready to answer the tough questions, and be authentic. Don’t try to be superficial; just give them the answer that they want. It may not be the best answer, but you’ve got to give it anyway.
Next, you want to know your limits, especially when it comes to valuation. The investor is going to try to ask you the tricky question, “What do you think the value of your company is?” Here, you definitely do not want to negotiate against yourself. What you want to do here is, you need to let them talk first. Basically, what you say is that based on the market, Company A to Company C that are your competitors, direct and indirect – maybe they’ve raised between a range from x to y, so you’re keeping it a little bit broad.
Then, you also say that you really believe in a partnership where there are two parties that win versus one that loses, which is what happens in a negotiation. And you’re basically putting the ball back on their court because the problem here is that the minute that you through a number, they’re going to try to negotiate you down. So, if they come up with a number first, you can actually negotiate them up from there, and that’s why it’s very important that you don’t negotiate against yourself.
Then, you really want to make a very good impression. Let’s face it. You don’t want to be late; you want to be on the dot, really. And also, you want to dress nicely. You don’t need to dress up with a suit and a tie, but perhaps business casual with maybe a blazer, or a shirt and trousers, and then also shoes. They’re going to look you up and down; it’s the way it is.
