How to Introduce Investors to Your Team the Right Way

How to Introduce Investors to Your Team the Right Way

Eager to introduce investors to the rest of your "rockstar team"? That meeting could be to your detriment. Here's how to turn your dilemma into a win and close the deal.

“We love you and your co-founder,but we want to meet the rest of the team.” The speaker was a partner at an investment firm thinking about sinking money into the startup my co-founder and I ran.

“Specifically, we want to meet the engineers on board and understand how they think about the product,” the partner told us. And, without even thinking twice, my co-founder and I promptly set up the meeting for the next afternoon.

The meeting happened. The partner and his associate met with our entire engineering and product teams.  We came out of the meeting in high spirits.

Which is why were shocked to find out the next day that the firm had decided not to invest in us. “We think you have a great thesis but the team is not really up to par to deliver on what the space needs,” the investment company partner told us.  “We saw some serious deficiencies that would have to be filled later on, at significant cost. Let’s talk at the next round once you have de-risked the company more.”

What investors expect

Often, as part of due diligence, investors will ask for a variety of materials ranging from product plans and customer contracts to even user testimonials. And, as a founder, you can control how all of these materials are presented. But the one factor you cannot exercise complete control over is the most important one: human capital.

By interviewing your colleagues, employees and collaborators, investors often attempt to understand whether the team has the knowledge, willpower and grit to pursue the opportunity.

Often these team interviews and meetings fall short of investors’ expectations. Those individuals may believe that the team is not experienced enough to build out a complicated technical product and incapable of pivoting at the right moment to build the product the market needs. Additionally, investors may believe that the team just doesn’t “gel” or isn’t “all in” on the startup’s mission. These conclusions can come from things as simple as body language.

Want to prevent this from occurring at your startup? Here’s how to position your team a different way — the right way.

Let investors “fill in the blanks” as you describe your team to investors.

Envision this scenario: You are in an investor meeting and the discussion starts to move toward your team. As founder, rather than offer to have the investor meet your team in person, you take another tack: You offer detailed descriptions of their skills and capabilities that clearly communicate your excitement.

You accompany these descriptions with visualizations. Using your naturally infectious descriptions as a foundation, you prompt the investor to take what you’ve said about your team and “fill in the blanks” with details that his or her own experiences and imagination conjure.

This tactic is nothing new. In fact, you are borrowing a popular filmmaking strategy. Lacking funds to build a mechanical shark while making Jaws, director Steven Spielberg used music and creative camera angles to create the feeling of a carnivorous creature on the hunt. Knowing that the audience’s imagination would “fill in the blanks,” Spielberg purposely set up the film to be that much more terrifying — and successful.

In a similar way, if you describe your colleagues, especially those in technical roles, as extraordinarily talented and qualified, investors will “fill in the blanks” in their own minds and equate those colleagues to analogous rockstar people they’ve worked with in the past.

In this way, you will successfully convince investors what you knew of all along: that your team is qualified.

Pre-empt the ask: Bring your best colleague to the meeting.

Again, let’s go back to that investor meeting. It’s smooth sailing as the meeting progresses toward the end and the investor seems copacetic. Yet, something is amiss. The investor didn’t ask a single question about the team or its qualifications. Why? You’ve brought along one of your most valuable colleagues to participate and answer the investor’s questions.

In doing this, you are not alone. Many founders look to bring one colleague, usually a technical leader, who has a strong grasp of business fundamentals, can easily explain the solutions for complex technical challenges, and can convey a sense of commitment to the long-term success of the company. Remember, though: Bringing too many colleagues to the meeting could overpower the investor and make him or her feel ambushed. So, be judicious.

Know that, ultimately, it’s about getting to “yes” faster.

The above tactics are about enabling you to close your round with less “last-minute” questions that could derail the entire process. Because what really matters to the long-term success of your business is not investor and team introduction strategy but rather working with your team to create a great product that customers love.


Read the full article on Entrepreneur.com:
How to Introduce Investors to Your Team the Right Way

Eager to introduce investors to the rest of your “rockstar team”? That meeting could be to your detriment. Here’s how to turn your dilemma into a win and close the deal.
Source: Entrepreneur.com By Alex Gold


When Pitching Investors, Your Product Doesn't Matter (as Much as You Think)

When Pitching Investors, Your Product Doesn't Matter (as Much as You Think)

Ever considered upping your storytelling game? That’s actually something as important to investors as your product.

It was a perfect sunny day and my spirits were high. My co-founder and I had a meeting lined up at one of Silicon Valley’s most prestigious investment firms, which had funded such startups as Snapchat, Dropbox and Airbnb. Our thought: We’re next.

We began the meeting with the firm’s general partner by whipping out our standard presentation deck. It provided a strong product overview and proof of early traction. However, this is when things started to go sour. The general partner started fidgeting, working the phone as thugh he had an impending Tinder date and distractedly gazing out the window as if to ask, “I wonder what ski conditions are like in Tahoe right now?”

Hitting a point of exasperation, he finally interrupted. “Honestly, I am sure your product is great,” he said. “But, I don’t care about the product as much as you might think. Stop going on and on. I get it. What I care about is what you are building for me. The revenue. The opportunity for return. That’s different than what you are building for your customers.”

That was the moment that we got it. Well, I got it.

Like every other entrepreneur, we entered the meeting eager to go over what we’d built and what we thought added the most value: our product. Also, being nervous during the presentation, we tended to focus on what we know best, which was (again) our product.

However, that approach ignored a critical point. Entrepreneurs are actually building two products: one for customers and one for investors. While the product you’re constructing for customers is the one you are passionate about, the product you are developing for investors is just as important. That’s because it’s focused on revenue, team makeup and other intangible dynamics.

Both “products” are crucial for success.  Here’s how you can master storytelling for these two critical audiences.

The product you’re building for your customers

Geoffrey Moore’s book Crossing the Chasm outlines some key concepts on how to focus on the product you’re building for customers. The first concept he details is an entrepreneur’s need to create a unified approach for the marketing effort companywide.

To maximize resources and ensure strategic alignment, the entire management team needs to participate in the product development process. The task can’t be left solely to the marketing gurus in your company. Full participation ensures that the story stays consistent from the first draft to the final unveiling.

His second piece of advice is to pay attention to the technology-adoption life cycle. In building a product for customers, you’ll need to know when they’ll be willing to accept new products, especially if your product involves some type of disruptive technology. That requires research to discover customers’ comfort level for changing something they’ve been used to doing a certain way.

Some customers will eagerly embrace a continuous innovation cycle for products, such as an upgraded version of their smartphones. Other products — for example, an electric vehicle — may take much longer to gain acceptance. Knowing customer interest, behavior and adoption rate is integral to building the right product at the right time.

Finally, Moore’s third concept has to do with maintaining momentum. No matter what the product may be, customers over time experience a continuous technological progression that affects their expectations and addresses their needs slightly differently. If you don’t address or incorporate ongoing emerging technology, your competition will steal your customers.

The product you’re building for investors

By way of contrast, investors tend to care about a different type of product. They want the intangible story “behind the company.” This usually includes four topics:

  • Product
  • Revenue
  • Team
  • Systems

To tie it all together for investors effectively, you’ll need a solid storytelling ability. According to Nathaniel Krasnoff, the principal at Wildcat Venture Partners, “The vast majority of the time, when you pitch, you’ll only get a 30-minute opportunity. It’s your one shot to get your foot in the door.

“With funds looking at anywhere between 1,000 to 5,000 companies per year, you need to be able to sell your company clearly and concisely, with a great story,” Krasnoff told me.

Storytelling, then, goes beyond a good pitch. “Storytelling is a foundational skill because if you can’t sell us, then you probably can’t sell your customers, and you will also probably have difficulty selling potential recruits,” Krasnoff said.

The product fallacy

Product is probably the least important of the four topics I mentioned earlier. It matters primarily in the earliest stages, as you are driving toward a minimum viable product (MVP). Yet, at a certain point, if you haven’t figured out your product, you won’t be able to raise funding anyway.

If an investor believes that what you’re building is legitimate and viable, he or she will do due diligence to learn more. The primary reason startups fail is that founders aren’t thoughtful about their MVP. They ultimately raise money for a sales team that is selling the wrong product.

Revenue and systems efficiency

When you’re thoughtful about what you’re building, the answer to, “Will this product make my users heroes at their organizations?” will be a resounding yes. From there, you will need to quantify what that means, in order to determine your pricing model and the systems you need to build. Next, you’ll follow up with a demonstrable and solid understanding of how you acquire customers and the costs.

Then you can go out and raise capital to add fuel to the fire.

Team above all

Building a company is the hardest thing you will ever do. That’s why no one wants to do it alone. The team you form will determine your success at every critical stage. This factor often becomes the difference between winning and losing.

If you surround yourself with the best people, then the journey becomes smoother. In interviewing many successful founders, I’ve discovered that they often had one key hire who altered the culture or built the right systems to change the company’s direction.

For customers and for investors

It’s helpful to measure your success along a chronology developed by Wildcat Venture Partners called the Traction Gap. As you move along the Traction Gap, the focal point of these four topics changes, while the key inflection point remains the same — the importance of building a product that customers will willingly buy.

Simultaneously, you must develop systems that reduce the friction involved in acquiring those customers. This helps raise the capital to scale those systems accordingly. And that in turn helps you create a product that matters to investors and customers alike.


Read the full article on Entrepreneur.com:
When Pitching Investors, Your Product Doesn’t Matter (as Much as You Think)

Ever considered upping your storytelling game? That’s actually something as important to investors as your product.
Source: Entrepreneur.com By Alex Gold


This Is the Only Reliable Way to Get Valuable Investor Intros

This Is the Only Reliable Way to Get Valuable Investor Intros

Expanding your network is the only way you’ll meet the investors you need to grow your business.

If you want investment dollars for your business, you need to meet people. But that’s easier said than done, right? If you had throngs of investors filling up your inbox every day, you wouldn’t be looking for ways to round up funding.

But I have some good news. You probably already have resources in place that can help get you there. Warm introductions are the key to generating investment dollars as in many cases, investors cannot take unsolicited pitches or introductions. If you can get mutual friends to connect you with the investors on your list, you stand a better chance of getting the funding you’re seeking.

The best new tool in your funding toolbox is lead mining, which helps you get those crucial introductions. Lead mining is an organized way to help you mine your contacts to find mutual connections that can make those introductions. Using lead mining, you can close your funding round in weeks when it otherwise would have taken months.

This strategic guide will help you get started on your lead mining efforts.

Create a map

To start, you’ll need to get a grasp of your entire network. LinkedIn will likely be the best tool for this, since this is where you can easily see not only your connections, but their connections, as well. At one time, you could generate this information through LinkedIn’s InMaps, but that feature is ancient history.

One of the best third-party tools for this is Socilab, which outputs a map of your network and gives you the opportunity to see your macro groups. You can also see “nodes,” which connect your various macro groups, and “outliers,” which don’t connect to your existing networks. Don’t dismiss the outliers. Those people can be just the bridge you need to that investor that most of your network has never met.

Meet with ‘super connectors’

Look over your network and try to identify the “super connectors.” Once you’ve identified those within your network who can introduce you to the right people, it’s time to get to work. Reach out and ask for a meeting, whether it’s an offer to buy lunch or a request for a brief cup of coffee to catch up one morning.

Once you’re face to face with the person, don’t jump right in to ask for a favor. Instead, make an offer to help the other person with something. Ask questions to determine what that connection may be working on at the moment and offer to use your own resources to help.

Ask for the intro

After you’ve scratched your connection’s back, it’s time for a little return scratching. You’ll want to be subtle about this. Nobody likes to feel as though they’ve been scammed into helping. Simply mention offhandedly that you’re thinking about pitching an investor you’ve noticed they know and see what they say.

You’ll immediately be able to gauge your connection’s comfort level with your ask in that moment. That will give you the confidence to proceed. You may find that the connection initially claims he or she doesn’t know the investor all that well, only to later get a phone call that they’ve mentioned your business or handed over your contact information to the person.

Repeat the process

Once you’ve achieved this first introduction, whether it lands investment dollars or not, it’s time to move up the scale. Shoot higher with each introduction, looking for investors who stand to help move your business to the next level. If you’ve identified a dream investor, always go to that map to identify someone who can help you meet the person.

Don’t forget to continue to expand your network. This will help you grow your focus from networking groups where you can meet potential investors and business partners to simply reaching out to meet others in your community. Everyone you add on LinkedIn, whether you meet them briefly at a national conference or they’re someone you worked with years ago, has the potential to help you reach your funding goals.

Lead mining seems like a game because it is. The problem is, many people know how to play that game and, yes, they’re looking for funding, too. Don’t be afraid to be aggressive as you expand your network, since that will help you get the money you need to grow your business’s bank account.


Read the full article on Entrepreneur.com:
This Is the Only Reliable Way to Get Valuable Investor Intros

Expanding your network is the only way you’ll meet the investors you need to grow your business.
Source: Entrepreneur.com By Alex Gold


7 Reasons to Never Send Your Deck to an Investor Before You Meet in Person

7 Reasons to Never Send Your Deck to an Investor Before You Meet in Person

Without you, your deck is just a memo with diagrams.

You’re proud of your deck. You worked hard to put it together, and you’re pretty sure it’s a presentation that will wow anyone who sees it — you can’t wait to show it off to investors. The problem is that VCs spend, on average, less than four minutesreviewing pitch decks.

The pitch deck investment is lopsided: While VCs spend mere minutes glancing over decks, companies invest in an average of 40 investor meetings before locking down funding. That means that funding doesn’t flow from the deck; it flows from the conversations surrounding it. If you send your deck ahead of time, you’re setting yourself up for something I like to call the “deck blocker,” which means you give potential investors the chance to turn you down before they even meet you.

Meeting you, however, is the first step in winning 39 more meetings. Here’s why you should make sure the first time your investors see your deck is when you’re standing in front of them.

1. You’ll give away the ending.

Chances are high that your pitch deck gives away everything about your business. It’s designed to show off what your product is and what problems it solves, as well as show how you’re going to make millions with your business model.

When an investor sees this out of context, it’s easy to judge your company without giving you a chance to debunk any misconceptions. Rather than sit across from a potential investor, countering objections, you’ll find yourself at the receiving end of a simple “Thanks, but no thanks” email.

2. You need to paint a worst-case scenario.

This advice sounds counterintuitive — entrepreneurs are encouraged to paint a picture of a world that’s better off as a result of their companies’ efforts. But the truth is that most of these rosy pictures don’t ring true; entrepreneurs who claim they’ll win 100 percent market share within a three-year period sound naive, which is a major turnoff to investors.

The better route is to use the deck to paint an ideal picture and then paint a more realistic one with your words. What’s the worst-case scenario? What will happen if people don’t invest? Explaining how Problem A, unresolved, will lead to Problem B, which will create Industry Trend C, is much more compelling than an ideal scenario that could ultimately be at the mercy of Industry Trend C, anyway. But you have to get in front of an investor in order to paint that verbal picture.

3. You need to acknowledge the competition — without giving them real estate.

Another naive tactic many entrepreneurs indulge in is deep, deep denial of any competitors. “We’re the first of our kind,” “our team differentiates us” and “our process makes us unique” are all common phrases that indicate an entrepreneur doesn’t realize that there are already others on his heels — or there will be soon.

At the same time, giving the competition a spot on your pitch deck is like giving them free advertising. To avoid sacrificing some of your precious deck real estate to the companies aiming for your same niche, you need to discuss them in person. Without a visual, they’ll be less memorable, but explaining how your organization differs from the competition — and improves upon it — will eliminate one real worry for your prospective investors.

4. Decks aren’t sales pitches.

If you’re a kick-butt presenter, your deck is built to enhance your telling of the story. When you’re standing in front of an investor, flipping through slides, the images connect with what you’re saying. Your tone, enthusiasm and supporting details tell as much of the story as the images on your slides.

When you aren’t there, those slides are merely words and pictures, leaving the investor to interpret them. This puts a spin on your presentation that could be misleading, resulting in your business losing an opportunity based solely on misconceptions.

5. People are much more compelling than a slideshow.

You may have the best idea ever, but investors are more interested in you than your product. They’ve learned through experience that they need to invest in people, not companies.

When an investor is judging your concept based solely on the presentation you’ve created, you miss the opportunity to build trust and camaraderie. Finding a way around sending your pitch deck ahead of time is an important first step in ensuring you get to meet that investor in person. Even if the investor has had the pleasure of meeting you previously, there’s no comparison to hearing you tell your brand’s story in the way only you can.

6. You’ll arm the competition.

It may sound like a tinfoil hat theory, but yes, some investors are shady. Even a trustworthy investor could end up hacked by a bad guy willing to give away all your great ideas. Some slide-sharing services have security features, which can help, but the safest approach is to avoid sharing the pitch deck in the first place.

7. You’ll weaken the presentation.

As I said before, you want to wow the investor. How are you going to do that if you give away the ending ahead of time? If the investor has already read through everything you’re going to present, start to finish, the result will be a “spoiler” effect that diminishes the power of the story you’re trying to tell. You’ll battle a checked-out listener who’s eager to cut to the chase.

So what can you do if an investor asks to see a copy of your deck? Be honest. Explain that your deck is designed to complement your presentation; without your narration, the information won’t be useful.

Maintain a document that summarizes what your company does, along with your revenue model and what you’re seeking. Make it clear that more in-depth information will be provided in the meeting, but send compelling information ahead of time, such as a link to a case study or the testimonials page on your website.

Play into the principle of FOMO, or the fear of missing out, by letting the investor know you’re meeting with other investors and that you prefer to streamline things by issuing a one-page description of your company’s offerings.

If an investor asks to see your pitch deck, run — or simply send over a one-pager that provides the basics of your business idea. The goal is to give investors just enough to pique their interest, but not so much that they judge your entire business model on a slideshow you put together to go with your earth-shattering pitch.


Read the full article on Entrepreneur.com:

7 Reasons to Never Send Your Deck to an Investor Before You Meet in Person

Without you, your deck is just a memo with diagrams.
Source: Entrepreneur.com By Alex Gold