By Bernie Dixon
If you were on your way raising capital before the crisis hit and then fell into an abyss looking for ways to connect with investors, it may be time to step out again. Many angel investment networks like The Atlanta Technology Angels and early stage venture capital firms like TFX Capital for Veteran-run companies have gone virtual. Honing your investor presentation for a virtual pitch is fairly easy especially for naturally enthusiastic entrepreneurs who are visually confident.
After many years of receiving presentations and requests for funding I’ve become adept at reading entrepreneurs. I recently talked with Lisa Calhoun at Valor Ventures, a seed stage Venture Capital firm who targets women and other underrepresented groups of founders for a first-round investment. Valor is conducting a virtual “Pitchfest” series for software companies: Register Here. Lisa is fiercely focused on deploying capital now and wants to see high potential companies. Here’s a few pointers on how to prepare.
Pursue funding frRom people and organizations that share your focus. You will save many hours of work and presentation time if you pursue capital from organizations that play in the same industry or demographic where you operate. If you are a consumer products company, you do not want to approach a venture firm that targets cybersecurity technology. Look for investors that know your industry and can assist you in more ways than providing capital. There are many venture firms that target women led companies like Launchpad2x alum. They are professional firms. You can have a leg up with investors that support women directly via capital funding. Your opportunity for funding is open for them. On the other hand, expect no different standards from those firms. They are very much interested in your plan to scale your business, move to a high margin stage and exit. Investors who focus on women led companies are not philanthropists. They are professionals who have targeted women mostly because of the trends in female led businesses. Women CEOs tend to receive less funding, employ less outside capital and are beginning to outpace their male counterparts in success metrics.
Get Investors’ attention immediately. Make the first minute of the presentation really count. Spending time on technical/connection issues may hurt your credibility and cut into the time allotted for your presentation. Capture the attention of the investors with a story that draws them in. It can be a story that depicts the situation that ignited your fire to build the company. It can be a story about the epic problem you are trying to solve. It can be a story about one of your customers achieving success with your services or product. Whatever the story is, rehearse it, multiple times. Ensure your story strongly draws in the investors and lures them into listening to the rest of your presentation. If you don’t draw them in immediately, particularly on a video interview, you may lose their attention. Your goal is to get the investors asking questions and interacting with you because they are excited about your company.
Present a clear vision of a world with your company, your solution. Your job is to show investors how your company will improve lives, solve an important problem, or make an impact. Create a description that depicts what that looks like. Describe how that scales in 12 months. Explain what that looks like in 10 or 12 years. As an example, instead of saying that you seamlessly manage data, describe how a patient can be treated through telemedicine and thousands of lives can be saved. Create that future state in the minds of your perspective investors.
Present your plan to achieve your vision. Having a vision is important. More importantly is having the plan and the ability to execute on your plan to accomplish that vision. Stating that you simply need to acquire 1% of a huge market will hurt your credibility and sound inane to an investor. Instead, describe how you plan to capture 1% of the market. How will you reach your customers? Are you partnering with distributors? Are you hiring a sales force? How much capital is required to support your execution? Are you hiring additional engineers to add features or more products? Investors will want to see you applying capital to areas that will increase the value of your company. Product development, increased sales, market penetration are key items to discuss. Get fluent in your company’s key performance indicators, not simply the number of clicks or social media hits. Your performance as a CEO in executing your vision is key for investors.
Have an exit strategy in mind. Investors will recognize gains in their capital investment when a liquidation event or exit occurs. It is important that you communicate the exit potential of your company. Research other related acquisitions in your industry or a related industry. Check into Crunchbase for information on transactions and what investors may anticipate. You may not be the first company to bring your particular product to market yet you can be better in many areas: higher margins, faster market penetration, better performance. Your competitors being acquired is an indication of the interest in the market. It is not a curse for you. Be aware of market movement and acquisitions and be prepared to answer investors’ questions.
Be extra aware of your surroundings. During a video presentation your surroundings will be magnified, and viewers can get distracted and potentially be more judgmental as a result. Make sure you limit distractions such as odd artwork or mirrors on the wall behind you or baby food on your sweater or hair. Re-examine your surroundings as if you are viewing them for the first time through a camera lens. With the current work at home policies some distractions are more acceptable. An occasional child’s voice in the background or a cat’s meowing caught on audio can be fine. Your judgement will make a difference. An occasional bark from you dog is acceptable. A constantly barking dog is not.
Ok. You got this. You’re ready to present in front of your laptop or tablet.
Be confident. Think big and, of course, play to win.
Bernie P. Dixon is Founder and Chairman of Launchpad2X, a founder-to-CEO accelerator training program for women entrepreneurs. Find her on LinkedIn.