When you meet an investor, it’s important to know more about the investor’s background. Use Google, LinkedIn and Twitter to learn more about:
The area of expertise of the investor
Previous companies the investor worked in
Companies the investor founded himself
The interests and hobbies from the investor
Their most successful bet and the biggest faliure.
You must know what makes them tick.
Have your documents ready
If you want to impress an investor (you should), you should have all your documents prepared. Documents you should prepare:
Financials
Pitch Deck
Business plan
Resumes of your team members
Prepare and Practice Your Presentation and Pitch
You should plan to spend approximately two to three minutes on each slide. Your presentation should not simply be a summary of what is on the slides. Instead, the slides should be used to support your verbal presentation.
Some investors may interrupt you frequently to ask questions; do not let this rattle you. You should know your material well enough that you can speak confidently about it without reciting a memorized speech verbatim.
Know Your Passion, Energize Your Story
Investors may view dozens of presentations per week in some cases, so you need to ensure that your passion for your venture stands out. Make your presentation noteworthy during the first few minutes so that you grab their interest.
For example, telling a compelling story as an opener is a great idea. Remember that the investor is investing in you and your team as much as they are investing in the company. Therefore, build credibility, and explain your education,
background and overall interest in what you are presenting. They should be able to clearly understand why you feel so passionately about your products or services. Your investment request should make sense from a numerical standpoint,
but you also need to develop a relationship with these investors from the start. Focus on selling yourself as well as the opportunity to your investors.
Prepare for tough questions
Prepare for a lot of tough questions. During the pitch, most experienced investors will ask a ton of questions. These questions are designed to weed out the most promising startups from the rest of the pack. Some common questions
to prepare for include:
What does the startup do?
What problem does the startup solve?
Why does your startup have a high growth potential?
Why is the team uniquely capable of executing the startup's business plan?
Compared to the competition, what does your startup do better?
What is the projected lifetime value of the customer?
What kind of traction has the startup achieved?
What will these funds help your startup do?
Some other resources might be helpful in preparing tough questions
Send Pitch Deck Teaser
Before the investor meeting, send a quick introduction via email. In most cases, it's a good idea to attach your pitch deck to the email. This gives investors some extra time to review prior to the meeting. With that added time,
investors can get a better understanding of your startup's unique value and prepare some succinct questions for follow-up.
Know your split
Investors are always interested in the division of shares within your startup. This is because they want you to have a fair amount of shares. Why, you ask?
Investors hate when a company gets a few rounds of investments and the founders are heavily diluted. Their biggest fear is that you have little shares left and you are unmotivated to work for your own company.
Know where the money is going
Let’s say your company is looking for an investment of $250,000, -. Being an investor, you want to know where this money is going. Is it going to sales and marketing? Or does 80% of the money go to ski trips and a fancy office?
Present the investor with a nice overview of how you’ll spend the money. If the investor asks for it, you should even be able to explain how each budget (f.e. marketing) is divided.
Don’t ask stupid questions
When you’ve signed a deal with an investor, it’s okay to ask (personal) questions. However, when you’re in the first few meetings, stay away from asking stupid questions. Things you should never ask during an investor meetings:
Don’t ask the investor about the size his fund
Never ask an investor to sign an NDA
Don’t ask the investor how long it will take to close a deal
Don’t ask the investor for his opinion on your company
Don’t ask the investor about other investments
Of course, when the investor starts talking about one of these topics, it’s fine to talk about it. Just be sure you’re not the one to bring these conversations up.
Follow up
After you’ve had the first investor meeting, it’s time to follow up. There are a few ways of doing this:
