This week I thought you'd enjoy a few comments from real entrepreneurs and venture capitalists.
Today I'll discuss some of what Tim Draper said about making the perfect presentation to investors. He is managing director of Draper Fisher Jurvetson.
At a recent conference for entrepreneurs in Marina del Rey, California run by PerfectBusiness.com, Draper said the following about entrepreneurs making presentations to investors:
"It has to feel like you're already in business and you have to make the investor feel like they need to get in on it." Those are words from one of the world's most successful and helpful venture capitalists.
So let's take a look at what we can learn from what he said:
- Emotions move investors to reach for their checkbooks. Note the word "feel" in what Draper said. That is an emotion. It is also a signal that he will invest if you stir his emotions enough. Note also the lack of a call for lists, facts, numbers and great graphics, and missing are calls for oratory skills of Churchill or Blair. That may sound strange to you techies, but serial entrepreneurs understand the power of emotions and work it into every presentation.
- Presenters fluent with their business plan get the money. These are the founders who have spent months, years, thinking and working on an idea for a new enterprise. Their hard work is in the form of a forty page business plan that is memorized. Ask them anything about it and they have an eager answer. Numbers about market size, figures about sales sources, headcount and cash flow pop up instantly. Strategy is presented as a done deal, no wavering. And so on. The presenter comes across to the investor as someone who knows a ton about the idea and what it needs to do to succeed. He is competent about what to do with the investor's money.
- Fear of missing the next Google makes investors leap to do your deal. Competition is the entrepreneur's best friend. Competition by investors eager to invest in your deal. You achieve that superior position by presenting an idea that has a core team ready to with a powerful competitive advantage in a potentially huge, open, growing market. "First to get it right wins" is how I see it. When the investor senses you've got that, have discovered the right mixture, then they will leap to do your deal. They don't want other investors to do it instead. So you'll need to plan your capital raising campaign with care and deliberation. The result will be investors lining up to hear your presentation, competing to do your deal.
BOTTOM LINE: These are special words from a great venture capitalist. Study them and reflect on the discussion of their meaning. Then apply it to your presentation for your next round of financing. That will boost your chances of getting the money from the investor you want to do the deal. Fluency with your business plan is key to getting the big check written. Dwell on what that means. And a calculated campaign to get the best deal from competing investors wins the day. When all that makes sense to you, you'll be well on your way to building a business plan so compelling that multiple investors want to get in on your deal. Your competitors will complain that's unfair.
I wish you The Best on your Adventure.
BOTTOM LINE: Investors want to feel you are an ace about your business, are raring to go, are ready to launch and all you need is some money to get started on a quest to become an amazing, enduring great business. Emotions play a key role. Think about that.