Preparing Oneself Before an Investor Meeting

Raising funds is one of the most crucial milestones for a new venture. More often than not, it is also one of the most difficult aspects to tackle. There are multiple avenues to procure funding, such as using your savings or borrowing from family or friends. However, the best source of raising funds is to have the support of investors backing your new idea. Such investors not only bring in the required capital but also invaluable knowledge and understanding of the industry.

Importance of investors

According to recent studies, about 90% of all startups fail. Although the main reason is the misinterpretation of the relevant market demand, the second biggest reason for this failure trend is the lack of new/additional funding. This is where the importance of funding and solid investors comes into play. When a startup succeeds in procuring the right investors at the right stages of its business lifecycle, the startup can function seamlessly. Moreover, when the financial aspect of a new business is taken care of, it opens up the way for other aspects like market understanding and demand to take shape and succeed.

What is an investor meeting?

Now that the importance of investors has been established, the next question to answer is what exactly is an investor meeting. Simply put, it is the presentation of a new idea to potential investors with the aim of procuring their funding. It is also much more than that. An investor meeting can be the make-or-break aspect of your business idea. It can mean the difference between the business seeing success versus not making it off the drawing board. An investor meeting is a foundation upon which a startup can build a strong base and flourish.

5 important points to prepare before an investor meeting

Preparation is an important part of everything that we do. So too with investor meetings. Without the right preparation, all the hard work you put into realizing your dream idea may go unfulfilled. Here are 5 aspects to prepare and be ready with before you meet with potential investors.

1. Create a robust Business Plan: The very first aspect to prepare for an investor meeting is the business plan. Analyze the dream idea behind your business and outline how to convert it into a solid, profitable operation. Define the strategies you will use to build your idea into a successful business. Include growth ideas, financial requirements, and the goals your business aims to achieve.

2. Prepare & practice the Pitch Deck: Every investor meeting revolves around one important piece of documentation – the pitch deck. The pitch deck is essentially the face of an investor meeting, the first point of contact that potential investors evaluate while you make your presentation. The pitch deck needs to stand out and grab attention. Visuals and graphic representations can be used to make it more appealing and concise. Some key aspects that should go into a pitch deck include:

• The vision for the business
• Market opportunities
• Viability of the product/service on offer
• Potential revenue streams
• Research and strategies on competitors in the market

And finally, rehearse the presentation to time it cohesively with the pitch deck. Keep the points simple and clear, and support them with the verbal part of your pitch to make it impactful.

3. Put together a dynamic Financial Plan: Potential investors like to know three things - exactly how much money they would need to invest, how the money will be utilized, and what kind of profits they can potentially make. This is defined in a thoroughly researched financial plan. As per expert opinions from experienced consultants and investors, a solid financial plan should include business income, expenses, business KPIs, profitability, market sizing, previous funding (if any), and finally ROI.

Be prepared to have an in-depth discussion on this particular segment of the meeting. Study your revenue model thoroughly and anticipate questions that may arise. Prepare backup plans for your financial plans to showcase to potential investors that you are ready to tackle any financial challenges that may come up.

4. Know your investors: Just like you spend time analyzing and understanding the market for your new idea, it is equally important to understand your potential investors. A plan that works with one investor may become a drawback with another. Make sure you do your homework and research every investor you are meeting with.

• Find out what type of companies they invested in previously.
• Research the success versus failure rates of those investments. This will tell you what kind of business plans they are likely to invest in again.
• Reach out to your connections who can give you more insight into the mindset of your potential investors.
• Identify the factors that your potential investors relate to the most and tailor your presentation accordingly.

5. Highlight your story and your team: Behind every new business idea is a core story that started it all. Potential investors hear hundreds of new ideas and business plans every day. Your task is to make your idea stand out from the crowd and be memorable. Narrate the origin story for your business idea and share your passion with potential investors. Everyone loves a good story that inspires and elevates the thought behind a simple idea. This gives you a way to connect with your audience and increases your chances of gaining investors.

The second prong is to highlight your team. It’s not just the numbers that make a difference, it is the human factor as well. The people who will realize their dream and work toward success are an essential part of any business. Showcase the talent you’re working with and their competencies with a little ‘humble bragging’. Investors want to know that they can trust you and your team to see the plan through to fruition.

Making the right impression on potential investors

Apart from all the technicalities of making a presentation at an investor meeting, behavioral aspects are also a key part of the preparation process. Here are some tips to help you make the right impression during the investor meeting.

·??????Make sure you wear professional attire that demonstrates confidence and grace.

·??????Always arrive early to see that everything is in place and ready for the meeting.

·??????Practice your pitch and tone beforehand to get comfortable with your subject matter.

·??????Keep your conversation enthusiastic and genuine, especially if you’re asked challenging questions during the presentation.

·??????Adhere to the time frame of the meeting. Make sure you follow your pitch deck and time it well so you don’t exceed the meeting period while leaving enough time for questions and ad hoc topics toward the end.

In conclusion

Preparing for investor meetings can be nerve-wracking at times. Big numbers, imposing projections, business plans, strategies, finances – it can become overwhelming. However, look at it as a simple interaction between two parties – you and a potential investor. The interactions may not always go according to plan, but don’t let that deter you. Learn from each experience, stay confident, and improve your execution each time. Preparation is key, and these tips will help prepare you to handle successful and productive investor meetings.

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