October 6, 2015
The afternoon is winding down here on the final day of our third annual Tech Cocktail Celebrate Conference, and everybody is eagerly awaiting the pitch competition with our five Startup of the Year finalists. However, the crowd was just as excited to see Techstars‘ John Fein take the stage to discuss how entrepreneurs can absolutely nail their investor meetings.
To date Techstars has invested in over 600 startups through their accelerator programs: overall they have $265 million under management. Fein brought his expert insight from Techstars to help explain that when a startup first meets with a VC, they have limited time to make a positive impression.
There are a lot of investors that make their decisions about the entrepreneurs within the first five to ten minutes of meeting them, so it’s critical to have a solid game plan. During Fein’s workshop we learned what most early stage VCs look for in the meeting, things entrepreneurs can do to stand out, and pitfalls to avoid along the way.
There was an incredible amount of ground covered:
Prepping for your first investor meeting
When you’re getting your foot in the door the most important thing you can do is have your key materials rock solid and at the ready just in case you need them. That is, it never hurts to have a contingency plan for whatever curve ball an investor might throw at you. By being 100 percent sure you know your market and competition, you can focus your efforts better on telling your personal story, or, the reason why you’re doing what you do.
Further, capturing the passion and obsession that you have for your startup needs to shine through, especially in repeat meetings with investors. It can be difficult to be energetic about every meeting, especially when you’re meeting with the same people over and over again. Just remember the reason you started up in the first place, and that will help drive you forward and keep your energy up.
The first, official investor meeting
Obviously, a first impression is huge. Most investors, since they hear pitches all day every day, will recognize patterns right off the bat so you need to come out strong. What are they looking for right off the bat? As Fein tells us, it’s an awesome team, a story, an obsession, a solid product, and traction. Not only that, they crave a fusion of near term strategy and big term vision – they need to know what, precisely, you want to be. Pro tip: don’t get hung up on dollars, it’s unbecoming and frustrating for the investors.
Things to do
You can probably guess which things you should do here, like being relaxed, professional, and making sure you stick to the script. However, Fein went beyond that to tell us some insider tips that will help you stand out from the rest of the herd.
Above all else, you should be 100 percent honest 100 percent of the time. It’s totally OK to say that you don’t know something, but you have to follow up with a call to action: “I’ll find out what I don’t know”. Further, don’t ever be worried about sharing the flaws in your business model, strategy, or team and how you plan to fix them. When the meeting ultimately ends, make sure to bring up any specific asks, follow up on the introductions they toss your way, and ask for the next steps to take.
Things not to do
Once again, common sense prevails here for the majority of the points Fein brought up. Specifically, you shouldn’t be arrogant, don’t argue with the investors, and have a working product demo. Not as illuminated by the limelight are things like filling your answers with buzzwords (Fein says investors hate buzzwords), have a pitch deck longer than 10 slides, and overemphasizing press and PR.
I think the best insight he had here was that you shouldn’t write off investors just because they’re lukewarm or appear disinterested to your pitch. Most investors play everything pretty close to the chest, so if they come across as distant it could simply be them doing what they do every other day of the year. Absolutely maintain contact with them, because until you get a solid no, it’s potentially still a go.
Manage the process
You’ll wish that your experience was as simple as a yes or no more often than not. Sometimes investors will give you answers on all ranges of the spectrum: a firm no, a slow no, no response at all, not no but not now, conditional yes, and yes. Regardless, you have to keep moving the process along. If you get a no, that’s fine – it’s done. If you get a yes, you can leverage the investor for more introductions and keep the train moving forward.
After the investor meeting wraps up
Review your notes, debrief your team, document any questions or issues you had with the process, and send thank you emails to investors with any specific follow up that was required or discussed.
If you can follow Fein’s advice here you stand a pretty good chance at nailing your investor meeting. As he told us, you’d be very surprised how many entrepreneurs simply don’t do any of these things – even the common sense ones. Good luck!
On October 4-6, Tech Cocktail Celebrate Conference is gathering hundreds of attendees, industry leaders, and inspiring speakers in downtown Vegas to meet the hottest startups and investors from around the country, learn and collaborate with others turning their communities into startup cities, and enjoy music, parties, and llama spotting. Check out more Tech Cocktail Celebrate Conference coverage here.
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