How do you pitch to an investor?

When tennis champion Roger Federer walks on to Centre Court, he doesn’t know the speed, angle or direction his opponent will serve, volley or return.

He can research who he’s playing and watch footage of that person in previous matches. But he cannot predict what they will do.

This is the opposite of a professional wrestling match, where every move and outcome is pre-determined.

The two sports require dramatically different preparation processes.

Professional wrestlers plan, rehearse and fine-tune each move. Tennis players, however, need to prepare for the unpredictable.

How to pitch investors? Prepare for the unpredictable

Investors will slam tough questions over the net that you need to return with a poised volley. It can be intimidating.

Many of our clients have told us that investor Q&A is the part they dread most. It is, however, essential to the process.

After all, any pitch suffers from information asymmetry – one party knows a lot more about the deal than the other.

It’s the investor’s job to ask tough questions.

They have a duty to peel back the curtain and look behind-the-scenes before reaching a decision, like financial detectives conducting a forensic exam.

That’s because the stakes are high. If investors hear a defensive or aggressive response they will get wary. They worry that you’re hiding something, and that the deal could backfire.

So how do you prepare for questions you can’t predict? Like Roger Federer, you practice, preferably with an expert coach.

How to pitch investors – How do you prepare?

At BBA, your coach will pose a tough question and you respond. Your coach asks a second question and you respond, and then your coach gives feedback on your first few answers.

You discuss potential stumbling blocks and your coach shares practical advice and insight that helps you shape a clear and coherent path through your thoughts.

Your coach puts the first question to you again in a slightly different form, and you give a slightly more concise, confident and persuasive response.

Some of the questions from the session will throw you

You take time to think them through, try out some answers and practise delivering them out loud on your own.

You identify  gaps in your knowledge and pick up a few additional facts and figures to use in your answers next time round.

You meet with your coach again, and he or she starts pounding the balls over the net. But this time, you’re ready to return them more swiftly and gracefully.

Instead of wincing when you hear a particularly aggressive question, you relax and smile, responding honestly but positively.

Within a few sessions, you’ll feel ready for whatever happens on Centre Court.

If you fail to prepare…..

After all, Roger Federer doesn’t start a tennis match hoping for a series of easy and predictable shots.

Likewise, invest in preparation and you’ll be able to embrace the tough questions as a challenging – but perhaps even enjoyable – part of the pitching process.

What do investors really want? Six tips

We wrote this piece with our Private Equity clients in mind.

But there are good lessons here for anyone pitching to investors or delivering new business pitches.

During the past few months we’ve been quizzing investors about how to pitch investors.

We’ve identified six main themes from their feedback that you can apply to your next pitch.

These six pitch tips are essential reading for anyone speaking to investors or delivering new business pitches:

How to Pitch Investors Tip #1. Think conversation, rather than broadcast

Investors tell us that those who pitch often ask what the investor wants to cover in a pitch meeting… but then default to their standard spiel anyway.

Or investors ask a question, and are told that it will be answered later on in the presentation. More often than not, the question never gets addressed.

The best pitches are conversations. In fact, the more interaction the better, as this helps the investors feel engaged and interested.

Takeaway: Think of your pitches as conversations or discussions, rather than formal, one-way broadcasts. Ask questions, act on the answers and respond to questions from investors as and when they arise.

Pitching to Investors Tip #2. Test your team dynamics

Investors say one of their key tests is how well the pitching team interacts. Does the team present a united front, or do the individuals contradict, interrupt or ignore each other?

When one person is talking, do the others remain attentive and engaged? Or do they thumb their phone screen or look impatient until it’s their turn to speak?

Another warning sign for investors is when only the most senior person speaks. They want to hear from everyone in the room. Otherwise, why are you all there?

Takeaway: Check if you are presenting as a team or a group of individuals. One way to do this is by role-playing different meetings and filming your pitch rehearsals.

Analyse your team dynamics and polish your imperfections before investors see you.

How to Pitch Investors Tip #3. Tell the truth

Some people are consistently successful – based on what they say in their pitches.

Bad deals are excised from track records, performance is adjusted in infinitely creative ways (explained in a footnote in tiny text) and simple questions receive vague, elusive answers.

Several investors told us they’ve terminated pitches immediately after encountering the above tactics.

Your investor pitch is the start of what will hopefully become a long-term relationship. That requires mutual trust, which can only come from transparency and honesty.

Takeaway: Investors know that if it sounds too good to be true, it probably is.

Acknowledge what you haven’t done so well. Talk through what you’ve learned from it or how you’ve changed your strategy as a result.

Then, when you speak about your successes, you’ll have far greater credibility.

Pitching to Investors Tip #4. Keep it brief

Investors tell us they crave brevity.

They don’t want to be taken though your 150-slide deck. They’re looking for a 20-minute high level overview followed by discussion.

Saying less, but in a memorable, engaging and succinct way, is better than blasting investors with too much detail.

Get across the heart of your strategy in three points, each backed up with evidence. Show your strategy in action, through stories about the impact you have had on portfolio companies.

Finally, don’t build up to a big reveal on slide 48. You may never get to it.

Takeaway: Write out everything that you want to say, then hack it right back. Edit ruthlessly until you are left with a compelling investment narrative, backed by evidence.

The rules of brevity apply to your pitch book, too. Score your pitch book for investor-readiness against our six questions here.

Pitching to Investors Tip #5. Communicate your unique difference

Investors tell us that many propositions look the same.

Naturally, they all forecast promising returns.

But as past performance is no guarantee of future returns, even business with strong histories of market-beating growth need to demonstrate more than a good track record.

• What does your team do differently?
• What is your repeatable ‘trick’?
• How will you consistently drive above-average performance?

Takeaway: Your pitch needs to convince investors that your team and business or fund are more attractive and transactable than the alternatives.

What is your unique difference and how does it fit with what the investors are trying to achieve?

Pitching to Investors Tip #6. Keep in touch outside of fundraising periods

Too many fund managers and businesses are like politicians – they only campaign when they want something.

Yet investors tell us that calls from funds or businesses who aren’t trying to raise immediate capital are rare but welcomed. They enable both parties to check for fit without the pressure of a deadline.

Investors’ decision-making process can stretch from as little as several months to as long as whole fundraising cycles. So you’ll regret your inertia if you wait until you’re actively in need of investment.

Takeaway: Don’t hold back your fundraising fuel for once every five years; keep the fire burning continuously and you’ll be rewarded with warmer investor interest when your hand is outstretched.

Pitch confidently, memorably and effectively

We can work with you to ensure your investor pitch is ripe and ready to impress investors.

Our team will strengthen every element of your pitch, including your:

• Investor proposition.
• Pitch book.
• Meeting performance.
• Presentation materials and visual aids.

Talk to us about your current situation and we’ll recommend the best way to get you and your pitch in shape before your next investor meeting.

Visit our website, call Louise on 020 7018 0922 or email her via louise@nullbenjaminball.com.

You may also be interested in our Little Green Book for Private Equity Fund Managers.

This short guide details what we do at each stage of the process and how we can help you overcome your challenges with investors.

About Benjamin Ball Associates

Benjamin Ball Associates helps clients to communicate better.

Over 12+ years the award-winning BBA team has coached hundreds of funds and firms globally to present powerfully. You get access to a transformational toolbox of techniques to help you become a clear, confident communicator.

We’ll help you create a powerful first impression that hooks and engages your audience immediately and we’ll transform you to deliver clearly, confidently and with impact.

Speak to Louise on +44 20 7018 0922 or email louise@nullbenjaminball.com to find out more and discuss your upcoming investor pitch.

 

Contact us to transform your investor presentations