Investors don’t want to show you their hand, but we recently got the inside scoop from a no-holds-barred forum which connected several investors and seasoned CFOs, like Joanie Nevins, a serial CFO, and Tim O’Loughlin, a partner at Eastward Capital, the venture debt equity firm.
Here’s their take on what you need to know before you enter the shark tank.
Include financial data
Investors care about two things: potential returns and how quickly they’ll get them. They want to know how you’re going to make that happen – with credible data to back up your promises. Some investors may even expect to see a detailed exit strategy included. Showing that you have a plan, and a general timeline, can greatly improve investors’ confidence that they’ll receive a strong ROI.
Structure your presentation carefully
Don’t try to reinvent the wheel — the classic framework is still the best:
1. Present the market need, opportunity and differentiator – all backed by external market sources
2. Dive into product specifics, go-to-market roadmaps and sales strategies
3. Provide some background on the leadership team
4. Show financials, the multi-year outlook and exit strategies
Using this logical structure provides investors with just the right amount of information at the right time.
Know your audience
Find out who will be in the meeting and research them ahead of time. Doing your homework will help you distinguish who knows the market the best, who is the most technically advanced and who has the most experience. Having this intel in your back pocket will help to ensure that you’re answering questions at the right level for each person.
When preparing for the meeting, consider how each person in the room will be evaluating your pitch. Try and anticipate their questions, and then rehearse your answers. A lot. You know what they say about practice…
Know your message
When the meeting ends, what do you want the investors to say about your company? It needs to be more than an elevator pitch on the product. What you need to get across is the market opportunity, the urgency to fill it, and the potential returns on their investment. How to do this: have a clear, compelling and tight brand story.
Want to learn more about how to prepare for your upcoming investor meeting? Download our newest market brief: Follow the Money: 5 Things VCs and Investors Want You to Know.