“Interesting. Send me something…”
Probably the four best words you can hope to hear after an initial random conversation with a prospective investor.
OK – it’s not as good as being asked for subscription documents or anything – but it’s an encouraging start to a dialogue nonetheless.
So, the obvious question is, what do you send?
Most managers will send their marketing deck, a fact sheet and maybe a couple of monthly letters or a newspaper profile, all prefaced by a “detailed summary” (a fitting oxymoron for most communications in our industry). It’s the equivalent of asking for a taste of ice cream and receiving a triple scoop in return.
I’m not saying that investors don’t need information – but like the ice cream, there is only so much they are ready to consume at this point. Until they decide that they even care about you, dumping piles of uninspiring material on them is unlikely to accelerate their process.
The objective at this stage is simple – and it’s not to get them to cut you a check (yet). It’s to establish a fit and create momentum with the ‘right’ investors, and then to get to the next stage of the process as fast as possible (a call or a meeting).
And since the average investor spends less than 2-minutes on the deck the first time they view it (and most spend far less), why not use tools that are designed to efficiently deliver your message in the amount of time you are given. A deck is definitely not that. All things being equal, we have found something along the lines of a short video and a one-page overview with a track record to be more effective at this stage – but that’s a conversation for another time.
If an investor wants a deck – of course, you send the deck. I’m not suggesting otherwise. But if you can get them into a meeting without providing it beforehand, then buck the impulse to drop it down in front of them the moment you enter the room (or displaying it on a Zoom call).
Look – getting an investor captive is not easy – and of course, there are no do-overs. So, ask yourself – how does handing out a copy of your deck help you at this point when you already have their full attention?
As before, the objective of the meeting is still not to get a check. The objective is to ensure they walk away excited enough to push the conversation into the next leg of their diligence process with momentum. This will likely only happen if you are successful in first demonstrating that your value proposition really does matter to them; and second by building a genuine rapport.
Talking at someone as you walk through text-filled page after text-filled page is about the worst way to build rapport or stimulate dialogue. Used in this way, the deck actually becomes a distraction. You are giving them an invitation to read while you try to talk to them. It’s the same reason we discourage sending the deck before the meeting – to prevent them from bringing it into the meeting and multi-tasking anyway.
Besides, why does anyone need an entire hour-long meeting with you if are just going to read them something they are perfectly capable of reading themselves?
Try to approach the meeting as an opportunity to engage in a conversation – a conversation that happens to center completely around you and your fund’s particular “story” (don’t get hung-up on the word – a story is just a narrative told in an interesting way).
And of course, what more engaging way is there to present a story than through “show and tell?” The “show” being select slides from the deck that help to visually emphasize a point or underscore an important message. Simple, clean graphics, diagrams, images, or anything that makes it easier for someone to absorb and retain a point.
A page full of words will never accomplish that.
At this point you are asking yourself why you ever bothered spending a hundred hours to build a deck. Two reasons:
1). There is simply no better process to help you truly organize your thoughts or critically evaluate and distill your story than when you go through the effort to build a deck; and
2). It is a phenomenal “leave behind” tool.
Think about it this way…if you indeed accomplished what you set out to at the start of the meeting, then the people on the other side of the table have an answer to the most important questions they will ask themselves –is this a potential fit, and do we actually care?
What better way to accelerate momentum than to put the deck into their hands for the first time than right after they realized the answer to both of those questions is a fat, hairy “yes!”