The dynamics of pitching investors and fundraising are likely going to change drastically in the next few months.
I have always believed that real-life interaction between humans is critical in the decision-making process for an investor.
The most comparable situation I have is hiring people. When I walk into an interview I observe the candidate's posture, clothing... we do small talk before getting into the actual conversation; all of this to catch hints and traits that can tell if a person is compatible or not with the position I'm hiring.
I can't see how investors aren't doing the same with the entrepreneurs they meet, and this ability is greatly diminished when you are looking at the other person through a webcam.
But that's just the reality of these world pandemic times, so in this video, I am going to go over some best practices on how to pitch investors remotely.
Most investor intros have always been remote. The best way to get in touch with a potential investor for your business is via a warm intro, after which you are expected to share your pitch deck.
Send a pitch deck. This should be a self-explanatory presentation that can be consumed in about 4 minutes, which is the time investors are willing to spend on these intro decks.
If the deck creates interest, the next step is an in-person meeting, which, again, is likely going to become a live phone call, in coronavirus times.
We made a video detailing this process, and some tips on finding investors.
Choosing a Video Conferencing Tool
What you are looking for in a video conferencing platform is stability: low chances of a crash, and an easy backup plan if things fail.
If the investors have a platform of choice, roll with it. That's the reason I have every single one of them installed on my computer.
If not, then my best suggestions would be Google Meet and Uberconference, which don't require any downloads, and both offer the option to join over the phone if your internet crashes or if the app doesn't work.
I would generally advise against Skype, which I feel is like using Hotmail at this point... but maybe that's just me.
Internet conference etiquette says that if the other person enables the camera, you should do it too. 'My camera isn't working' isn't really an excuse.
Avoid rookie mistakes
These should all be pretty obvious to most savvy tech people, but here are some tips just in case.
Use your calendar! Accept the event invitation and check it at the beginning of the day: the calendar invitation is going to be 100% correct on any timezone you are in. Sometimes the time reflected on the email creates confusion because it might be in the other person's time zone.
Be a troubleshooting expert: make sure you know where to switch mics, change headphones, and know how to do it under pressure.
If there's a mobile version of the service you are using, make sure you have the app installed long before the call.
Make sure you've pre-enabled screen sharing permissions for the app you are using.
Now, speaking of screen sharing.
The standard way to do slides remotely is, indeed, screen sharing. The challenge with screen sharing is that people often share their full screens, with cluttered desktops and awkward tabs in their browsers.
I'm going to do a shameless plug here, but Slidebean has a much better alternative, our LIVE feature.
As the content owner scrolls through the slides, anyone watching will have their slides synced as well, without the need to waste bandwidth on sharing the screen. It's included with any of our plans.
End of plug.
Now let's get to the actual pitching
A one-on-one pitch with an investor doesn't look at all like your classic on stage pitch. It's not a script; you don't need to deliver your slides with that punch. It's more of a conversation. I believe that being able to hold this casual conversation will speak wonders about your ability to manage these interviews, which you'll have plenty of in the future.
Now we've covered extensively what a pitch should and should not include, check our videos on pitch decks. In this case, the slides become more of a storyboard, a guide of what you want to talk about, rather than a script.
This slide, for example, introduces the topic, traction, and gives you highlights on where to start, but how much you elaborate after that depends on you, on your read of the room.
If, for example, your traction is strong and this combines with a growth-focused firm you are pitching, I would dedicate a lot of time to this slide, bragging about the marketing tactics that have worked for you and how demand is high.
On the other hand, if you don't see any excitement around your numbers, switch to focus more on the tech or the team background.
It's crucial to have a good understanding of timing. This is actually an advantage when pitching remotely. In the room with investors, you need to control how many details you get into to keep the pitching part of the meeting in around 15-20 minutes, but you need to do this, often without looking at the clock.
That's of course not a problem on a video conference.
As with any meeting, it's also important to close it with a call to action.
Make sure to ask where you stand. Don't be afraid to ask them if there is interest or not.
If you get a no interest, it's probably going to be a no forever. That's fine, walk out. It's going to hurt the first few times, but then you'll get used to it.
If you get a 'not yet,' usually phrased as 'this is probably too early for us', make sure you ask what metric/KPI you are missing to get to where they want you to be.
Ask investors for permission to email them about your progress. Create a small mailing list and update your investors monthly: it's a fantastic way to remain on top of mind, just like with your customers.
We literally finished closing our 2015 from investors that we had kept on our mailing list and came to us after seeing our progress.
Again, don't be afraid to receive flat nos. They are better than 'pending' conversations because they let you move on.
Now, after the pitch
First, I'd recommend recording yourself and the call, if possible. This will allow you to review your performance after. It will also let you listen to the feedback again with a cool head.
Make sure you follow up with a copy of the presentation and send it in a way in which you can track if they've seen it again. We can also help with that.
Then, please keep track of every investor conversation, how you met them, what you discussed when was your last contact, and what they said. You are going to be speaking with dozens of them, and it's very easy to lose track of where you are in the conversation.
Some thoughts on the fundraising landscape during economic downturns
Thomas Tunguz is an investor at RedPoint Ventures that has a fantastic blog on fundraising, especially focused on SaaS companies. He published an article last week on the impact in Seed and Series A deals during the 2009 Financial Crisis. Overall, the number of seed and Series A deals remained similar, while Series B and Series C rounds were the most affected.
Remember, venture capital funds have already raised their capital, and now they need to deploy it. While they need to be more cautious about it, they still need to deploy that capital.
Angel investors, and Friends and Family investors who are deploying their own wealth are likely going to be investing less. Be prepared for that.
Beyond your ability to raise, you have to accept that all your customer assumptions are now wrong. The world has changed. There's a recession on the horizon. People will do social distancing. They are going to avoid leaving their houses. With borders closed and overwhelmed healthcare systems around the world, they are going to travel less. They are going to work from home. Your business and your business model should be prepared for that.
After spending a couple of weeks pretty unproductive because of the news cycle, I finally realized that it's in our hands as entrepreneurs to kickstart the economy after this is over.
We know how to work under pressure. We know how to overcome these roller coasters. When our brains meet challenges, we come up with solutions. That's what we do! And that's why it's up to us to keep the economy going. The money your company makes translates into jobs, which the world is going to need.
So go get back to work! Not before hitting that subscribe.
By the way, if you are struggling with isolation, take a look at our Startup Cafe. A FREE virtual cafe to hang out and chat, vent and share ideas with other founders.