Shark Tank venture capitalist Kevin O’Leary recently said, “It’s all about the money, all the time.” O’Leary is right. When you are asking for money from an angel, VC, PE or IPO institutional or individual investor the key message is about how the investor will eventually make money by supporting your company or idea.
On the other hand, you can’t walk into a pitch like Cuba Gooding in Jerry McGuire and shout, “Show (give) me the money.”
Pitching to investors is hard work and fraught with risk. It can make or break a company. The challenge for the actual presentation vs. a written pitch book or slide deck is when you are seeking capital you must prepare and rehearse for a variety of settings – the 10 minute pitch at a bake-off contest, the full 45 minute presentation with Q&A to an investment committee, the one-on-one when the investor just asks questions before you show a single slide.
While there are no foolproof secrets – and you need to be flexible to adapt to the presentation format – if you understand the Triangle of Persuasion, you will increase the odds of a favorable outcome. The Triangle of Persuasion forces you as the presenter to adapt your content within three variables – The Audience, The Stickiness of the Message and your own skills as a Presenter.
To develop your presentation with the triangle, you need to:
- Know your audience
- Create convincing messages that support your science, technology or research
- Improve your personal, persuasive communications skills.
Your audience is usually not as technically savvy as you. They will, however, likely have a general knowledge of your industry and subject if they are considering investing in it.
The one thing your potential backers will care about is: What’s in it for them? Investors want to make money and they’re not going to invest in you unless you convince them that doing so will be profitable. For early stages, it’s not about whether your company or idea will be profitable, it’s whether you can bring the concept far enough that their investment will be profitable when they or you sell to someone else. For later stages, you need to show how both investor and owners can make money.
Rule number 1: Don’t start an investment presentation with general background on the company, product or management team. Begin with a slide of reasons on why your audience should invest.
You may be tempted to start out by talking about how you’re unique as a company or your management. That’s an important part of your presentation but it should come later. In the beginning hook the investor by telling them how they can benefit from funding you.
Rule Number 2: Develop a hook or story that connects the reason to invest with a trend, anecdote or story that illustrates your product or idea. It might occasionally be a bottom line message. More often for the oral presentation it will be a memorable anecdote, image, topical reference or analogy.
Here’s an example that perked up the audience at an investor conference. A neuroscientist working in stroke research wanted to convince potential backers that his technology was superior in taking detailed images of the brain. Instead of first showing brain scans, he began with a slide progression with blurry images that transformed in a 3 slide sequence into a photo of the Mona Lisa. This was a lot more memorable for the investors than just photos of a brain – which came later. The investors dubbed it the “Mona Lisa Presentation” and complimented him on it.
Once you research and understand your audience including what they have invested in before and what other connections you have with them, tailor and refine messages and slides. Examine every detail and make sure to discuss:
- Management: including advisors, and the science or tech teams
- Milestones: what goals you plan have and when you’ll reach them
- Obstacles you anticipate/understanding of the competitive landscape
- Reasons to invest: Make this the opener and the closer to really drive it home
Rule 3: Visuals can be as important as your messages. Don’t overload them with information, and don’t sabotage yourself with industry jargon. Make sure your presentation can be easily understood by an educated financial audience.
Rule 4: Rehearse, rehearse, rehearse. This is the “You” side of the Triangle of Persuasion. Actors and world-class athletes know this. Put another way: First impressions matter. One investor told us, “I usually know if I’m going to invest before the scientist even opens his laptop.”
So how do you go from a no to a yes before you open your laptop? Rehearsal is essential to giving off the confidence, poise, and conviction that the investor is looking for. During practice focus on: correct body language and hand gestures; maintaining eye contact with your audience instead of the laptop or the screen; demonstrate passion and confidence, especially when dealing with difficult questions; keep your cool while handling mistakes and tech problems, then recover and move on.
All of the elements of the Triangle of Persuasion come together in the Q&A preparation: No investor is going to “show you the money” without asking questions. Handle these questions by keeping two things in mind. 1: There’s a reason why Congress has an approval rating below 10% right now. Nobody likes a politician, so don’t give political answers by “bridging” or “pivoting” to other subjects without answering the question. 2. Learn the better way to “bridging”. For example, an investor may ask about your competition. You need to acknowledge and answer the question first, and then “bridge” to what your company is doing better, or differently.
No presentation is going to be perfect; you’re not pre-recording a video that you can do over if you mess up. But that’s a good thing, because the most important part of your presentation is the interaction with the audience. Make sure you’re prepared, and then take advantage of being face to face with your audience. These are your future business partners you’re presenting to, and this interaction is what closes the deal.
Andrew Gilman is a CEO of CommCore Consulting Group, a leadership and crisis consulting firm based in Washington, D.C., New York and Los Angeles.