This article is based on our professional experience and interviews we’ve conducted with senior partners in leading venture capital funds. We summarized our conclusions in the form of 3 dos and don’ts for start-up entrepreneurs. As you’ll note, these guidelines are not about your start-up ideas per-say. Rather, they will address the manner in which you present these ideas to investors.
Put yourself first.
Every entrepreneur we’ve worked with was conflicted regarding the appropriate moment to discuss a personal experience. Let us solve this one for you. Present yourself at the beginning. As in, the very beginning. Right at slide number 1. Many speakers tend to forget that investors invest in people first and ideas second. Good ideas are a dime a dozen, but experienced people who can execute those ideas are hard to find.
Also, the best thing you can do is relate your personal history and experience to the idea you are presenting. If your idea has to do with data cleaning and you’ve worked in this field before, talk about your past experience. Describe the process which led you to identify the challenges, and prompted the insights and ideas you are presenting to them now.
Most importantly, it will show that you are passionate about what you do. Most entrepreneurs have a good story to share however, they get caught-up on the business side of things assuming it is expected of them. It is not! Passion is contagious, and it will inspire your investors to support your venture.
So, don’t start with your idea – start with the problem your idea is designed to solve.
You’ve been developing your idea for months, working out every last kink, so it’s only natural that you’d be eager to show it off. But before you do, take a moment and think back to the day it all started. Back to the time when it was just you, sitting in a room, wondering, “How come no one thought of this before?” Or, “Why does everyone do it this way, when there is a much better way to do this?”. This is your idea’s story, and that’s how you bring your potential investors on board. Take the application Waze, for example. What would be the best way to introduce the product? Sure, you could just say it’s a location-based navigation platform that helps users finds the least-busy roads. You will make a much more compelling introduction however, talking about the fact that most GPS apps present the shortest route, but do not factor in traffic. Similarly, if you are presenting the app Shazam – instead of describing how it functions, talk about the problem it tries to solve. Start with the question: Have you ever heard a song on the radio or at a bar and wished you could find out what it was? Enter Shazam…
Get to know your potential investors.
Even if your product’s potential market is worth billions; even if there are global companies lining up to buy just what you’re selling; even if you’re sitting on a technology that can disrupt an entire industry – don’t forget that investors are people too. People who sit through countless presentations just like yours every year. In fact, they’ve probably heard better ideas than yours. At the end of the day, your investor has a limited amount of money to disperse, and that’s where the human factor comes into play – the same human factor that made Bill Gates invest millions in Kahn Academy after seeing his daughter watch their online classes.
At the most basic level, if your investor has children, you’ll have an easier time selling him a product that involves kids. If your investor likes music or sports or anything that’s in the same realm as your idea, there’s a good chance you’ll stand out. This is all to say that if you know your investors well – really well – you’ll know how to appeal to them. If they’ve shown a fondness for technology-based start-ups in the past, appeal to them through technology. If they have a record of investing in social ventures, try a social angle.
How do you get to know your investors? Google them, look them up on social media, contact people who know then personally – every bit of information can come in handy.