I agree with Howard, that the presentation can be as much about the relationship between presenter and investor as it is about the plan itself.

What we, as investors, look for is a team that knows its stuff, can be trusted to deliver, and that will work with us as a partner.

I’m turned off by excessive glibness “all we need is 1% of the market”, and I’m much more impressed by someone who answers that they don’t know (so long as they don’t give that as their answer to everything!), rather than by someone who blusters.

Successful presentations also tend to be 2-way affairs. An entrepreneur who asks (sensible) questions about my fund and how I might help is doing two things: demonstrating they are thoughtful and making me feel like they have other funding options.

Hi Earl,

A couple of things I’ve seen work universally from both the entrepreneur and investor perspective — in syndications that included funding large numbers of young companies, including some of the most successful, and some not.

1) The source of the information has a very strong track record– a referral from someone like me who nailed MSFT, Google, and many others before almost all other professional investors is insane to ignore for an active investor. A few do anyway, but to their own losses as case history has proven many times. Most investors are totally ignorant of reality at the early stages.

2) Multiple credible customers attached to the offering with references — letters of intent at the least– contracts work much better. Most investors fuel growth– particularly VC today — very very few invest pre- revenue.

3) The content of the offering resonates with those who are in a position to know whether the tech is valid, claims are real, and markets healthy and conducive. This only works with smart investors and smart individuals who refer to investors — a small group of angels, consultants, etc. with deep knowledge of the specific sector.

.02

If someone will buy an asset for the reason of money making only he is at a big risk, since risk assessment is one of the greatest issues that end at employee level. I doubt that institutional investors look that deep. They put much believe in CXO competence and that is another greatest issue in the business. Who can tell one leader from another under different risk factors?

Any initial meeting is where we sense each other. If you’ve done enough homework to due diligence the partner you already know him and this makes him fade. The art of a salesperson (definitely the entrepreneur seeking an investment) is to use this preliminary information in his hands to make a good contact and “take the control” over the mind of a buyer. Do not go to those you can find a little about – a waste of time. And that’s a very short story about it.

Another end is investor. I would say they do not spread much information on themselves. And that makes first and eventually any contact an act of a chance. Establishing human contact is essential for partners whatever position in life they take. One cannot establish investor-PM relationship in a lack of information about each other.

All sad gives excellent grounds for fraud and commissionaires around the topic. Strange but somehow I figured it out the more sincere and open you are the less confidence in project and team it gives. Exclusions exist.

Sorry that I have not sad a word about presentation – for me it is merely a tool that works only in the hands of a good master (salesperson). Tuning your tools is a different and extremely personal (in this case) issue.

Presentations to investors are not just about products and services and how they will be marketed. Presentations to investors are a tool by which investors gauge the capability and integrity of management teams. No projection is executed precisely according to plan. The skill of the management team will determine how the Company adapts to changing circumstances to fulfill its mission. No manager is 100% correct. The integrity of the managers will determine whether they fully disclose what did not work as well as what did work. An equity or debt investment is a long-term relationship and must have mutual trust at its foundation. While it is not possible to fully illustrate superior capabilities and high integrity in a single presentation, one can still demonstrate these traits. For example, management can present a range of contingencies and the plans to meet them. Management can discuss prior plans for new products or markets and how the team dealt with actual results that differed from expectations. Essentially, investors are seeking capable managers who will be transparent and honest in their business dealings.

Presenting to potential investors requires you to change gears quickly since every investor group has a different evaluation process.

Some will want to understand the business opportunity and financial returns estimates first before they ever take a serious look and others will want to understand if you have an industrial strength solution before they get into the finacials.

So having just one presentation or one a canned approach to market yourself is a dice throw.

I suggest you have a short, meduim and long presentation and be very flexible. In all of them though you need to answer the question why should they invest.

Dr. Smith, two quick things that also help (in my experience) are:
1. having help- you don’t need an advisor to write the presentation for you, but you do need someone who has been through the process to help you in advance
2. you need to be able to read the audience- this is especially true with PE firms- sometimes there is a lot going on in a room that is non-verbal, and people can be pretty stressed out handling the presentation which can lead to missing the “signs”

Best,
Dana Price

I have learned there is no trick or magic formula. Everyone should know what the essential elements are for a good deal if you did a little homework. For the presenter, what works is also not a secret: honesty; passion; knowledge of the space; and a coherent plan. You all know that.

Here are 2 aspects that have not been mentioned yet:

Honesty is indeed the best policy. Every smart investor knows that you don’t know everything. But do you (i.e. Socrates quote of to know you don’t know is to know a lot)?. Just have a plan, and not a “deer in the headlights” look when asked something you don’t know. They are going to ask you questions that you should have anticipated anyway. If you didn’t, then it’s your fault for not being prepared.

Second point I want to make is you can not forget you are SELLING. Any book on sales will tell you that a sale comes down to an emotional decision. The really good salespeople are great communicators, honest, and have a high level of intregrity. After adding up all of your feedback, if you don’t get funded, the deal is missing something, or you have not communicated something.

In recent years, I have been on the receiving end of many painful presentations, not only from start-ups but from estalbished firms as well. It is amazing to me how many people will simply not do their homework prior to meeting with key decision makers.

Most of the value propositions I have heard in the past 2-3 years (and I have heard a lot of them) are not based in reality and are effectively a version of “my dog is better than your dog.” This quote I especially like, and it is from an actual presentation by an established mid-size software company–“Decreased human errors by 100%” Does this mean the humans go away completely? And what about the humans that wrote the program?

Questions I ask in my head are always, Overstated? Demonstrable? Defendable? If the presenter does not meet this test, then there is most likely not a follow on meeting.

By way of disclosure, I am also writing a book on the subject of value propostions–the good, the bad, and the ugly.

One other quick story. Years ago we were making a presentation to the Director of Planning for a major firm. The question from out team was along the lines of “what is your biggest source of pain ?” In the short silent period as he formulated his response and just as he was beginning to speak, one of our engineers (abhorring the silence) jumped in with a joke and sent the conversation in another direction. We left the meeting without an answer to that question. We did not get the sale either.

This is an interesting discussion, and i look forward to following it. If anyone has any questions about my perspective please feel free to contact me.

BTW, I can make critical comments because throughtout my career I have made all these mistakes and more–as they say “been there, done that and have loads of T-shirts”.
Best Regards,
Scott