When Presenting to Investors – analyze, don’t sell

This isn’t the time for  presentations that emphasize only the positive.

I was recently in the audience as an entrepreneur was pitching his business plan  to angel investors.  He was well-groomed, polished and articulate.  Just as I was warming up to him, he made a critical error.  He slipped into salesman mode.

He summarized his first slide by saying “I know that you’re not going to want to miss this incredibly attractive investment opportunity!”  From there he went on to accentuate the positive, discount the concerns and continued to sell himself with misplaced humour and an overly smooth delivery.  I don’t think anyone invested.

Don’t blow your chance to secure that needed funding by kicking into sales mode.

When considering a business plan investors are analysts first.  They want and need the whole truth.  This is not the time for exaggeration.  This is not the time for one-sided presentations that emphasize only the positive.  This isn’t a job interview in which you want to put your best foot forward.

Be an Analyst
To be effective in your investor presentation you must prove that you are an analyst and are willing to share the results of your analysis fully and openly with prospective investors.  You both are assessing a possible opportunity and have a common need to understand the picture as fully as possible.  You and your team have spent a lot of time analyzing this opportunity.  Share the results – one analyst to another.

When people in your audience sense that you are selling to them they immediately fall into buyer mode.  Caveat emptor. They wonder what you aren’t telling them and if they need to put a discount on the projected growth and sales. They wonder what you’re hiding in your eagerness to close the sale.

Walk into your next investor presentation as an analyst, not as a salesperson.  Here is the scenario to have in your mind:

You and your team have done a thorough job analyzing what you see as an attractive business opportunity. You are sharing the results of that analysis to see if there might be a fit with the investors’ interests. You will share what you have learned openly and fully, including the elements of your plan that convinced you it is indeed worth pursuing and the elements that still worry you. You are open to any ideas, thoughts or concerns. Your objective is to succeed and the more you learn, the better your chances.

The investor would love to know what analysis you did to gain comfort around the key business questions. Share it. Answer key questions including why you choose that market; how customers in that market will be better served by your product and why your competition isn’t taking advantage of this opportunity.

In writing your business plan, you and your team have painstakingly worked through all of these issues and developed a point of view.  You have something that your prospective investor needs – a rigorous, fact-based, full and honest analysis of the opportunity.  Give her/him the highest quality product you can deliver.  Your credibility will skyrocket along with your chances of success.