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If there's one thing Shark Tank has made completely clear, business owners should know every aspect of the number of their businesses. When you walk into this room, you will know better your cumulative year-to-date sales, the cost of goods sold, and the cost of customer acquisition, or you will toast.
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With images like this as a guide, it's no surprise everyone thinks that the most important things to consider when meeting a potential investor are to create as much confidence as you can and to keep all the numbers in your presentation. But what is really critical is some other work that you do before you open the door and enter the room.
Ask yourself these three questions:
1. Why do I do what I do?
Of course, your company's numbers are important; Either way, you should be able to drive down your sales figures and customer lifetime value, and you should be able to confidently explain how you plan to use the funds you raise. However, trust does not come from knowing your numbers. It comes from knowing your "why".
Why do you do what you do And why should investors care?
Your “why” doesn't just focus on your presentation or pitch, but also on your company. You and your team can rely on something when things get tough, when there is a tough decision to make, or when you stand in front of an investor and get nervous.
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If you need to figure out your “why” or think more about how to articulate it, here are some things to consider: What values are reflected in your company? Values such as integrity, joy, curiosity, freedom and creativity drive us to our goals in a noble way. Rely on these values. Trust comes from knowing who you are and why you are standing in front of this investor.
2. How can I create an emotional connection with the investor?
During this investor meeting or pitch, make sure you clearly communicate your value proposition, know your audience, and keep the authenticity of your narrative. When meeting someone for the first time – an investor or not – it's important to have feedback if the goal is to have a lasting relationship. Resonance is creating an emotional connection; It tells the right audience the right thing at the right time.
Ask yourself, "Who is my audience?" and know exactly what they are about as this may vary depending on the type of investor you are talking to. For example, an angel investor is likely to be using his or her own money. If he's not investing in your business, he may opt to invest in the stock market or even opt for a nicer vacation. One venture capitalist uses someone else's money. They have a fiduciary duty to do the job they are paid to do. A limited partner also uses someone else's money, and that person is likely only paid, so their interests are completely different. Presentations to each of these audiences should focus on what is important to them.
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Not only should you put yourself in the shoes of your viewers to talk to them about what is most relevant to them, but you should also look for something in common with them. Emotional connection ultimately comes about through similarities, and the more specific, the better. For example, at the beginning of the Covid-19 shutdowns, we all felt disoriented, but in practice most of us had to find a new place to work (probably a dining table in our kitchen) that wasn't as comfortable as our usual space. In networking meetings and presentations, speakers who commented on their back or neck pain were instantly awarded brownie points from the audience for talking about a certain commonality that many of us were experiencing. Other similarities might include college or university attended, community involvement, or hobbies such as gardening, watching sports, or drinking wine / whiskey. Don't be afraid to jump into these things as they can serve to strengthen your bond.
3. What impact does my company have on my community?
It's not just social impact investors who care about your impact in the world – many angel investors, VCs, and limited partners want to know that your business will create jobs or that communities will receive tax revenue from your company that will enable them to invest in yourself. In other words, have some specific examples of how your business is going to make a difference.
The impact your business is having on your community could, and in some ways, should be traced back to your “why”. There is nothing wrong with making money, but many investors want to know that you make money by improving society in some way.
If you ask yourself these three questions before that investor briefing or meeting, you are more likely to have confidence in what you do, resonance in what you say, and influence when you deliver. You may hear the word “yes” more often from investors.