Questions are tricky to prepare for, as you don’t know exactly what you will be asked. And, different investors approach questioning in different ways.
So how do the most successful fundraising teams handle investor questions effectively?
Having prepared management teams for fundraising for over 10 years, we recently polled our team of expert advisors and identified the core elements of a successful investor
Too many people treat tough investor questions as an exam.
They feel the need to answer each question correctly in order to pass. That attitude leads to failure.
Instead, think of yourself as a teacher.
You have a topic you know well, and you have a student (the investor) who wants to know more. Your job is to inform, educate and perhaps even entertain. If you do it right, you may build a strong personal relationship, which is important in helping the investor feel comfortable about investing in you.
We all know what drives investors – it’s getting a financial return.
So investors need to balance expected returns with risk. But weighing expected return and expected risk is subjective. That means each investor will assess you differently.
For some, it will be about measuring you as a person, for others it will be about gathering more data.
And people have their own style – from super soft to nail hard. You’ll have to assess what they are looking for and how they work. The best way to do this is to listen to and learn from the comments they make and the questions they ask.
Take a mental step back when you hear a question.
If you are not sure, you may need to clarify their question before answering.
Without clarification you may be answering the question you want asked, rather than the question they want answered.
And as you listen, you will learn something. Most investors are looking for management teams that listen to them and want to learn.
It may sound stupid to you, but every investor question is aimed at unearthing something.
Don’t assume that you know what the investor really wants.
Perhaps they don’t understand – or perhaps they are testing how you react to “stupid” investor questions (yes, they do this!).
So treat every question with respect, consideration and then use it as an opportunity to help the investor understand your business (and you) even better.
If you are properly prepared for your investor meeting, then you will have key messages to get across.
Use your answers to reinforce, restate, or reframe your messages.
Beware of treating tough investor questions like a tennis match. You do not want to score points with your answers.
Instead, like a teacher, you want to enlighten the investor and perhaps help them see the world the way you see it. One powerful piece of advice is Show, Don’t Tell. Use stories, examples and illustrations to bring your business to life when answering investor questions.
As we said before, your meeting is not an exam. It’s more like a meeting of minds. So work out what the other person believes and is feeling.
How can you do this?
You could ask probing questions, such as:
For more hypothetical questions you could explore what they believe: “And what do you think?”
The more it feels like a conversation rather then a quiz, the more likely you’ll be successful.
We have seen too many people turn up to investor Q&A sessions unprepared.
By contrast, successful fundraising and management teams prepare with the intensity of an elite athlete.
After all, you want to be seen at your peak when meeting investors.
There are three best practice techniques for preparing:
For important investor events, we frequently spend many hours preparing teams with tough questions, video review and rehearsals. Just like elite athletes, you only build muscle strength with practice.
There are some investor questions you cannot answer.
If you learn our approach of Question Triage (a technique for classifying questions up front) you can spot these a mile off. Then you can use proven techniques to get yourself back to safe ground and onto a topic that you can talk about with confidence.
Investor question sessions often end flat.
Frequently, people feel pressured to finish quickly, especially if time is short. This is a mistake.
Never miss this opportunity to reinforce your important messages while also showing that you have listened to what the other person has said.
Even a strong 30-second summary at the end will show that you have listened. This can also highlight what they need to hear.
AKA the Columbo moment.
If you are a child of the ‘70s you may remember the TV series Columbo.
The bumbling detective always finished his interview with a suspect and, as he walked away, would say “Just, one more thing….’ With that one line he caught the suspect off guard and got the information he needed.Illustratedjc / CC BY-SA. Illustratedjc
If you’d like to improve your handing of tough investor questions, please give us a call.
We’d be happy to discuss ways we can help you. For example, we run extensive investor Q&A session to build skills and increase confidence.
You’ll find that working with our experts is a small investment that can deliver amazingly high returns.
To discuss how you can improve your next investor question session, please call Louise Angus on 020 7018 0922 or email firstname.lastname@example.org.Help me improve my investor Q&A
Fundraising presentations are hard work. You're bombarded with challenging questions from investors, worn out by long days, and struggling to...
Investment decision-making is not totally rational. Are you using all the tools at your disposal to create and deliver persuasive...
Do your public speaking skills inspire, motivate and influence others? They should. Many leaders are nervous of public speaking. Some...
A great investor pitch book is at the heart of successful fundraising. You use it to capture the essence of...
Better Body Language We all know that body language is important in business. But how important? And does is really...
How can you be seen as a top 1% fund by investors? At SuperReturn Emerging Markets in Amsterdam, experienced LPs...
A great elevator pitch is an essential part of your toolkit Last month I chaired the Quickfire Showcase at Berlin’s...
You must prepare for media interviews The excruciating Newsnight interview with Treasury Minister Chloe Smith this summer is one example of...
These days, we are writing more than ever. That means it’s harder than ever to grab attention. Your readers have...
When an investor questions how you calculated your Private Equity fund's performance, how do you react? If an investor asks...
How do you choose a public speaking coach? When selecting a public speaking coach or presentation trainer, you want to work...
How To Use Powerful Language For Leadership Communications Great leaders use Power Language. It adds interest and colour to...
So What? is probably your most important question. When you put your talk or presentation together, how do you decide what...
What do LPs want from private equity funds at first investor meetings? That's the question I put to the panel...
What do investors really want? Six tips We wrote this piece with our Private Equity clients in mind. But there...
Do you want to give high impact talks and presentations? Do you want to engage your audience? And do you want...
How to tell a great business story Leaders use storytelling so that audiences listen, remember and act on what they...
How do you make your investment pitch more memorable? It's a real challenge these days. Investors have more opportunities than...
Your leadership talks need to be persuasive As a leader, every talk or presentation you give is an exercise in persuasion....
A well-crafted private equity pitch book can make the difference between securing a first meeting with investors and getting a...
“BBA transformed our pitch into a compelling investment narrative. They undoubtedly helped us secure Sky TV as an investor.”
Gerry Bastable Director, Blast Films
“The new presentation properly represents the institutional quality of our fund. It has been a step change for us.”
Erwin de Kleijn Head of IR, Saemor Capital
“We were very pleased…[BBA] helped us define and explain our unique value proposition. As a result we have attracted new and different investors.”
Florian Kemmerich Managing Partner, Bamboo Capital Partners
Client Services Director
+44 (0)20 7018 0922