"What These Investors Think"
Issue: #2 - 30 October, 2007
Article Word Count: 713 words
Time to read: Approximately 4 minutes
Give yourself a very short break and read it now.
You’ll enjoy it.
It was a big week – 10 companies presenting to 14 investors.
Over the last few weeks I have been working with 10 companies to get them ready to pitch to a group of 14 US investors. Last Friday, the group made their presentations to a room packed with senior investors from Roche, TechCoast Angels, TriAn Technologies Venture Capital, Pharmaventures, Burril & Company, Hamilton Bioventures and many more.
As well, we had aspiring entrepreneurs who wanted to learn much more about the venture capital game. This was a great opportunity to see the pitching process LIVE.
I interviewed a group of investors who attended this Investors’ Summit. I was interested in exploring what they considered important when pitching.
Without exception they were all of the very strong opinion on this one.
If you don’t ENGAGE investors then you won’t succeed.
All put the ability to ‘engage’ the investor as the number 1 priority. This outranked hearing about the technology, the deal, the people and all those other issues that are raised during a pitch.
So, let’s look at this presentation skill in a little more detail.
What does ‘engaging’ mean?
Here are the essential elements of engaging investors:
- Create an atmosphere that is friendly and informal
- Let your personality shine through
- Listen, listen, listen
- Get a 2 way discussion going during question time. Monologues bore them to death
- Discuss their suggestions
- Adapt and demonstrate that you can be flexible. This is a bit tricky. You don’t want to appear that you will just ‘flip flop’ from idea to idea so it is a fine balancing act
- Be passionate and enthusiastic when you pitch. They love it!
- Get specifics into your pitch. Nothing puts off investors more than 10 minutes of broad picture comments that could apply to almost any company. This is a tough one and you’ll need to work hard to get it right.
Here are some examples of what happened during the pitches...
Firstly…
Most of the entrepreneurs (8 out of 10) did a great job of creating the right ‘feeling’ during their pitch. They kept the language simple, the jargon was minimal, they were relaxed and they knew their stuff.
You could see the investors feeling more confident about what was being said as the pitches progressed. The investors believed these entrepreneurs. And it all happened within about 2 minutes. That really put these 8 entrepreneurs into a very positive light.
And during question time they very carefully listened to the questions. If they weren’t quite sure then they asked for clarification. You get a ‘gold star’ when you do this. It demonstrates in a practical way that you want to get it right.
Next, the dynamo with little substance
One entrepreneur was a dynamo. He was so passionate. He bought in samples of his product and had a natural ability to generate enthusiasm in the investors. It was looking good. The pitch didn’t cover some points but you could see that the investors saw past that.
UNTIL question time and it all fell apart.
With each question he just dug the hole deeper. He hadn’t thought through the key issues, he had no idea what investors needed and his distribution strategy had a bunch of holes that you could drive a truck through.
The final verdict – he needed a professional CEO. The investors would not go ahead without a more professional approach to the business.
And the ‘one man show’
This entrepreneur fell into the trap of being a ‘one man show’.
He’d had some problems protecting his intellectual property. Unfortunately, during his pitch, it sounded as if he had retreated into a ‘siege’ mentality and had not involved others enough in the development process.
You could say it was early days and the collaboration could come later when an investor was on board. But these investors were not prepared to give him a second chance. It was just too risky for them.
And a final note…
Some people are just naturally good at engaging. But don’t let this deter you. Investors don’t want you to be the most charismatic personality. There is a lot you can do to engage investors even if this does not come naturally to you.
Till next time.
Cheers
Gail Geronimos
Co-Founder
Achaeus
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