You’re about to meet a prospective investor or buyer for the first time. The way you present your business and plan can influence an investor’s degree of comfort with you and the value they place on your business. How should you handle the meeting? Whether you are meeting with aventure capital firm or a strategic buyer consider these guidelines:

Take control of the meeting

It’s your meeting. Investors want to finance confident leaders. Plan to make a presentation no more than half an hour long. Your goal for the first meeting is to prompt further investigation by the investor. Don’t expect to present every detail about your business at the first meeting.

Start at ground zero

Assume the investor has no knowledge of your business. You may have sent him or her executive summary or a business plan, but for your first meeting, start at the beginning.

  • Present all relevant background information about yourself and the other key managers.
  • Discuss the origin of your business and how the management team was formed.
  • Present a concise summary of the business opportunity
  • Focus on the fundamentals – management, market opportunity, competitive advantage, and profitability.
  • Emphasize the uniqueness or competitive advantage of your business.

Answer questions concisely

  • Be prepared to handle questions. Brief, quantitative answers are best. Be careful not to ramble on with generalities.
  • Investors expect specific information about such issues as market size, competition, financing requirements, etc.

Keep your management team in reserve

Generally, a solo presentation of the entire opportunity by the chief executive is best for the first meeting. You won’t need your functional managers on hand if you stay focused the big picture

  • e.g, rather than have your V.P of R&D discuss technical details, the CEO could emphasize the competence and accomplishments of your technical managers.

Maintain personal contact

The personal contact of an informal discussion is effective in building rapport with an investor, while a brief programmed presentation can also help to convey data and illustrate the business opportunity.

Show trust in the investor

  • Avoid requiring a signed confidentiality agreement at the first meeting.
  • Present the business opportunity without disclosing any secrets.
  • Market potential and business concepts are not proprietary secrets that need protection.

Insisting on a signed confidentiality agreement can be an impediment to trust and obtaining financing.

In a future meeting it may be appropriate to request a confidentiality agreement in order to protect a well-defined secret such as a chemical formula. Or, you may need a secrecy agreement to avoid public disclosure of an invention in order to maintain patent potential.

Keep your options open on price and structure

It is premature at the first meeting for you to bring up financing or sale terms or price. Rather, speak in general terms and indicate flexibility if price and terms are requested by the investor. But, be confident in your assessment of financial needs and the use of financing proceeds.

Be realistic

State your goals for the company. Discuss the obstacles you face and your weaknesses as well as your strengths. Specify how you will utilize the proceeds of the financing.

Turn the tables

philosophies about management and control; industry preferences; related investments; source of capital; exit objectives?

Reach closure

Discuss a decision process with tentative milestones and dates.

  • What is the next step?
  • What will the due diligence process involve?

Don’t expect an instant response and thorough analysis from the investor. However, most experienced investors will usually provide some initial feedback before ending the meeting.

In short, keep your first meeting with an investor brief and focused on the macro opportunity.

  • Attempt to establish trust and lay the foundation for a long term relationship.
  • Be specific about the amount of capital you need and how you will put it to work productively. Indicate flexibility on structure and terms of the financing.
  • Try to learn about the investor’s history and philosophies about management structure and control.
  • Finally, establish a process with dates and milestones for the investor to reach a conclusion. Practicing these guidelines will help you get started on the right foot with a new potential investor.

For more information, contact our team of industry experts at Impact Capital Group

Michael Cohen

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