How to present to investors to win investment
July 08, 2022
It’s very frustrating. You have a great business; you have solid plans and you’re sure you have a killer investor presentation. But you are struggling to make an impact.
What is going wrong? How do you present to investors?
Whether you are selling your business to a trade buyer or you are looking for an external investor, we see the same investor pitch mistakes over and over again. We’ve been helping firms polish their investor presentations for over 12 years.
And by ‘presentation’ we mean the investor story, the pitch materials and how the team comes across in investor meetings — the whole package. We help private companies, private equity-owned businesses and public companies improve their investor presentations.
In this list of the top mistakes, you may recognise what is going wrong with your pitch.
1. Is your story too complicated when you present to investors
If your business sounds complicated, it will also sound difficult, risky and unattractive.
As the CEO of a business, you probably suffer from the curse of knowledge. You know so much about your firm that it’s often hard to put yourself in an investor’s shoes.
What an investor wants is a clear, simple story to share with other people. Your job is to simplify that story so that a potential buyer has a clear picture of the investment you are offering.
It is very tempting to include more information in your pitch, but the more you include the more diluted the important information becomes. A weak pitch includes extensive information but fails to shape that information into a compelling story.
Simplifying is often the hardest part of creating a powerful investor presentation. So the best firms use external advisors to simplify their investment story.
2. Are you underselling yourself in your investor presentation?
- You are successful; there is a reason for that.
- You have loyal customers; there is a reason for that.
- You attract and maintain great talent; there is a reason for that too.
But do you talk about these things in an easy-to-understand way?
Too many firms are happy to lay out data and information, then fail to tell the compelling story behind the data. But investors don’t buy data. They buy the story, the potential, the thing that makes you different and successful.
You want to get your buyer to not just hear your impressive story but also to feel it and believe in it. When they believe in you, they are more likely to invest in you.
3. Are you transparent about the challenges you face?
Every business has difficulties — big and small.
It’s always tempting to play down your problems. But by downplaying them, it may feel to a buyer that you don’t fully understand your business. Worst of all, if you don’t mention challenges and these crop up later in the sale process, it may look like you are being dishonest.
So, be open about what problems your company is facing, and talk about how you’re addressing them. If it’s clear that you are good at thinking about the future and planning for uncertainty, you add credibility.
By being open, you can turn your weaknesses into strengths.
Help me improve my investor pitch
4. Is your future journey clear enough?
It’s easy to talk about what you have done. But the value of your firm to a potential investor or buyer lies not in the past but in the future. It helps when you can share a clear vision for what comes next.
Are you facing uncertainties? You can describe this as giving you options. Are you addressing change in your market? You can show how you can adapt to those changes. Have things gone wrong? You can show how resilient you are.
What is important is that you demonstrate that you know how to continue growing and improving your business.
Your future story should make up most of your investor story. The clearer that future feels to an investor, the more value they will place on you today.
5. Do you look and feel professional enough in your investor pitch?
If you have a high-quality business and an impressive team, you want to be sure your pitch is equally reassuring.
This means more than hiring a good graphic designer. A professional investor pitch involves all elements of your interaction with potential buyers. You want your buyer to see a team and a business that give them a warm, joyous feeling from every contact. And that is why the best firms invest in presentation coaching.
If you achieve this, you can feel more confident about building a long-term positive relationship with that buyer.
6. Do you speak the language of investors when you present to investors?
Many companies talk regularly to customers, but rarely pitch to investors. Customers and investors are different animals and need to be treated in different ways.
And depending on the type of investor or buyer you have, you’ll treat them differently too.
When we prepare management teams for investor meetings, we role play extensively so that the team feels comfortable flexing their style to match different types of investor. And we also help teams avoid the temptation to ‘give a presentation’. A good investment meeting is a 2-way conversation, with as many questions as answers.
Once you practise this, you’ll look impressive and feel so much more confident.
7. Are you pitching or explaining in your investor presentation?
Few of us like being sold to; but we all like learning something.
Too many investor pitches sound like a hard sell, or a 1-way presentation. The best pitches we work on become conversations between a management team who know their stuff and an investor who knows how to invest. Those two groups then work together to find the perfect fit.
What this means in practice is that the pitchers become teachers, helping the investor understand their business. They also demonstrate their curiosity, wanting to know what the investor thinks and how they could work together.
This fresh approach to pitching creates a positive feeling and makes it much easier for the investor to know what it will be like working with this management team.
8. Does something not feel right?
This is probably the main reason that investors don’t invest. ‘It does not feel right.’ It isn’t a perfect excuse — but it sums up years of experience in investing.
What can you do to create a better feeling when presenting to investors?
The most practical way to generate a positive feeling is to practise. That means for every investor meeting, every question, every bit of presentation, you try it and improve it. I don’t mean ‘rehearse’ — that is what actors do when they already have a great script. I mean practise like a tennis player, so you continually build your skills to improve what you say and how you say it. You also polish how you look as a team and improve the impact you make with your investor.
The best management teams always practise.
What next?
Those are the most common mistakes we see with our clients. The good news they are all repairable. We work day in day out helping companies create compelling, persuasive investor presentations.
If you want help to prepare your company to speak to investors, contact Louise Angus, our client services director. She’d be happy to discuss how we might be able to best support you.
