It’s September. The investors are back from the end of summer break and paying attention again. There are funds to be deployed, and meeting to take, the holidays will be here again before you know it and they’ll once again disappear, so it’s a good time to get that investor deck out and those meetings lined up.

 

We work with founders all the time, helping them to refine/write their decks, since, as we’ve said before, all founders think the 10-15 slide construct is written in stone in terms of the order of the slides, and often bury the lead. Or are so in love with the tech they’ve created, they didn’t bother to include the lead at all. And do keep in mind that your deck is a teaser. Purpose: to get you to that meeting with investors.

 

One of the chief problems that founders have when pitching to investors is that they don’t listen. Or stop to ask questions. Or answer them. Remember: you’ve already sent the investor your deck. They’re taking the meeting. You’ve already gotten them interested, so don’t waste their time reviewing the deck in excruciating detail. Or your product. They’re buying the vision, not the product. Don’t waste time trying to sell them your product. Give an overview of the company, the traction, the team, the financials, whatever wins you’ve had to date – then ask what further the investor would like to know. In brief, and feel free to just come out and say it: what questions can you (the founder) answer that might help to move the needle forward.

 

But this is what most founders, especially first-time founders, miss:

 

You’re not going to a bank for the money, you’re going to an investor, be it an angel or early-stage VC. In any event, they’ve got the money and you need it. Let’s pretend you don’t have a tech startup, and that instead, you’re a first-time house flipper – someone who buys a house, preferably on the cheap, that is in need of renovation; does the work, then resells it at a profit – and that you’ve found a property you’d like to buy and renovate, but need a mortgage to do so. Luckily, the banker you’ve targeted lives in the same neighborhood as your potential flip (subject matter expert), and it’s the neighborhood eyesore. So, do you think the banker is interested in hearing the details of the landscaping? How you plan on upgrading the look of the house itself? What colors you’re going to paint the master? The Money is interested in the financials. You’re going to do the work yourself – but do you have the skills necessary? There was a fire in the house due to faulty wiring. Do you have the skills to rewire the house? How much will it cost to hire an electrician to do it? And a team to take on all the other physical labor that needs to be done, like retiling the roof? Nice renderings you’re showing of what the place will look like when you’re finished, but where are the labor and materials costs? If you don’t have the skills and knowledge to pull this off, that banker is going to wait for the next person who walks through the door, who does have an A game.

 

And note to self: investors would rather put their money on an A team with a B idea, than a B team with an A idea. They want that team or founder who’s going to take them to the finish line, meaning, bring them an ROI.

 

A very important point to remember that most founder/CEOs miss: the CEO is about business. Investors want to hear about the business, not simply the product. Touch on the product; focus on the business.  Coming off as the product guy first and foremost is a red flag and you run the risk of being relegated to the B team category, no matter how good the product.

 

A special heads up to those founders who need a fresh infusion of cash, who have little or no progress to show for the last infusion they received, be it traction, sales, serious LOIs: do not pass go; do not expect to get another round of funding. To investors, you look like an investment sinkhole, or as an acquaintance of ours so appropriately coined it: an entrepreneurial gigolo: a founder who is perpetually raising money and showing no difference in any of the numbers relevant to investors from the last round. Or believe it or not, even progress with the development.

 

An entrepreneurial gigolo, attempting to live off the investor teat.

 

As we said, it’s September. Time to get your ducks lined up, before they head south along with the investors, and ok, many are already there. Investor winter is coming, and it’s not a good time to get left out in the cold. Onward and forward.