Meeting with investors is nerve-wracking, but could lead to a life-changing opportunity. With so much on the line, it’s important to come to the meeting prepared not only to show them your pitch deck, but to wow them, start to build a relationship with them, and give them confidence in how you’ll solve problems that arise in the future.
Through my experience running Modular and years mentoring and advising, I have prepped hundreds of startups for meetings with investors, and wanted to share my tips to help you prepare for your meeting:
There’s this myth that you have to know every detail about your company’s future and be the very best at your skillset before walking into an investor meeting. This is an unrealistic notion and totally false.
Admitting that you don’t know is better than bluffing. They’ll see right through your response, so don’t be false. Just admit that you don’t have the answer at the moment! You can always just describe the factors you’re considering or how you would go about collecting the data needed to answer. Investors want to establish a long-term relationship with you and if they can tell you’re not being totally transparent and honest, the foundation of that relationship will start to crumble before it’s even built.
Honestly assessing what you do and don’t know shows humility and maturity.
Obviously, giving a giant “I don’t know” is not the right response, so show curiosity and return with answers as a follow up to your meeting. It’s better to show self-awareness and openness to their suggestions.
Seasoned investors have been through hundreds of pitches, so they’re not depending on your perfectly mapped out trajectory, they’re trying to figure out if they want to invest in you.
Think back to the last math class you took. Did your teacher care if you had the right answer on a test if they couldn’t see how you got that answer? Most of us would say no. Investors are the same way. The end result will come, and it might not even be right to begin with, but if the process you took to get there is promising, you’ll eventually see the results.
I recently heard Tim Chang of Mayfield Investment speak at a conference and he said that almost all of the companies he invests in end up with a totally different business plan than what they had initially pitched to him. This is fine because he doesn’t invest in the plan — he invests in the character of the founder(s) and their team.
Again, describing your thought process and analysis is a lot more meaningful than superficial stats and bulletpoints.
Instead of focusing your pitch on your company’s offering (which as mentioned above will inevitably change as it develops), take the time to talk about problems you’ve encountered along the way and how you and your team worked to resolve those issues. Giving investors a glimpse at how you work together and re-strategize to keep things going tells volumes more than simply explaining your product. It’s not just about showing problem solving in production or testing, but in team relationships too. Your company culture will be a huge piece of its success, so show — don’t just tell — investors that you have healthy founder relationships.
You’re not always going to agree with your co-founder, and in a lot of ways that can be a great sign that you’re going to have different approaches and beneficial tension that will lead to creative results. The important thing is to use your differences to your advantage and demonstrate that you have a helpful way of managing any conflicts you deal with. For example, if you have a dynamic founder relationship, show your investors a datapoint that you dug up, how you interpreted it differently, and the conclusion you came to together. Just like when you go out to dinner with a couple who’s constantly saying critical things to and about each other, you know there’s not a lot of respect there and it’s not hard to spot. It’s the same thing when you’re presenting to an investor. They won’t be fooled by phony founder relationships. As an example of good stories to tell to demonstrate your team’s strength in working together, maybe you talk about how one of your co-founders was diagnosed with an illness and ended up having to leave the company. Share how it’s been hard and what you lost, lay out how you dealt with it and moved forward. Or maybe it’s how you had this huge tension where you weren’t understanding each other’s perspectives and you resolved it by doing a family regression therapy or going on a retreat where you uncovered underlying issues. When your story is real, it’s convincing and investors will care about it.
Yes, be prepared and show investors why you and your offering are awesome. But also respect their time and humanity by speaking with them, not just pitching at them. The old adage to treat others how you want to be treated still applies when you’re fundraising. Showing the basics like being organized and polite goes a long way. Spend your time building rapport and talking to them like you’d want to be talked to by a potential long-term partner. Welcome investors’ expertise with questions and goals of what you’d like to learn more about, what you’d love to hear advice on, etc. It won’t only help to break down the walls between you and them, but it’ll show them that you’re going to value them and their input if they partner with your company — you’re not just seeing them as a dollar sign. Don’t forget — they’ve taken time to listen to you, the least you can do is express your gratitude for the meeting with a big thank you at the end. Who knows, if you make a good impression, but they’re not a good fit for you, they might want to refer you to other investors that are better suited. Oftentimes founders get so wrapped up in preparing their pitch materials, they neglect the communication piece! Don’t be these founders! You are the team that runs the company, so you’re first impression in this key meeting is vital to your success.