How to prepare for, secure and run an investor meeting

One of the things I love and I’m very proud of, is the community of founders and expert mentors we have built at Focused for Business. 

We meet regularly to share ideas, and there is something very powerful about founders from all different sectors, who are on the same start-up roller coaster pooling and discussing their experiences with each other. Many of the founders I’ve worked with have fed back to me that this network has been invaluable to them as it’s given them a chance to learn from others who are on the same journey, and it gives them a sounding board and safe place to go to to discuss their own professional challenges and experiences and get advice from other founders who may have been there and done it.   

One of the challenges shared recently by a founder was around an investor meeting he recently attended. 

The founder met the investor several months ago where he struck up a brief conversation about his startup and the fact that he would be raising equity investment soon. The founder was early in his fundraising journey, and had a number of unanswered questions which he needed to work through, such as how much money they were looking to raise, the valuation they were raising at, and he also needed to finesse the documents he’d use when starting to pitch to investors, such as his financial forecast. The founder and investors agreed to keep in touch. 

When the time came to start fundraising officially the founder naturally got in contact with the investor, and was asked to send his pitch deck to a more junior member of the investor’s team. The junior team member quickly reviewed the investment pitch and set up a meeting with a more senior investment partner and the founder. Great news, so the founder thought!

The investor meeting came, and to the founders dismay, the investors on the call were unprepared. They hadn't reviewed the deck that the founder had provided, and spent the opening of the call asking who the founder was and what the company did. 

The founder was naturally confused, and it raised concerns in him about what the investor would be like to work with, and their professionalism, if he did take their investment.

What to expect from a first meeting with an investor

Unfortunately interactions like this aren’t uncommon when dealing with investors from funds for the first time, and  other founders in our community have shared their experiences.

VC and family offices tend to speak with many founders each week and see hundreds of investment opportunities. Because they receive such a high volume of pitches, they tend to run a screening process for the startups. 

In this example it’s likely that the junior investor was Stage 1 of the screening process, and would have reviewed the startups’ investment deck. If they liked it, which they clearly did, they would set up an initial meeting to meet with the founding team - this would be the second step of the screening process. 

The first meeting with an investor is likely to be online, and the expectation is for the founder to pitch to the investors, and take them through their investment opportunity.

On our Funding Accelerator programme we have a session dedicated to leading the first investor meeting, so you can be on the front foot. But the onus is really on the founder to lead the meeting. 

Start with Questions

We recommend starting the investor meeting with questions, so you can get a feel for the investor and can demonstrate you have done your homework on them. It will impress the investors that you have done research, shows intention, and that you are in the driving seat, which in turn will give them confidence in how you will operate your business. 

The type of questions you could ask could be:

“I can see that you typically invest in businesses like xyz -  What appeals to you about our business?”

Or 

What appealed to you about our business that made you want to meet us? 

Asking these sorts of questions will give you a real sense of the investor, and the type of businesses they back.

Another area of questioning to ask an investor in your first meeting is about their fund. You can ask questions such as:

When did you last invest in a company?

How big is your fund? 

How much has already been deployed?

What’s your average ticket size?

Questions like this build up a picture of how much funds they still have to deploy and by when. 

In a way, the first meeting with an investor is similar to a discovery call with a new potential customer - you’re finding out more about them, what their motivations are, so you know the best way to position your investment pitch to them to increase the likelihood of receiving funding. 

Tailor your pitch

After the initial questions, you should be prepared to do a ~10 minute pitch to the investor. If you are able to, and feel confident enough, it's also worth adjusting your pitch to speak to what motivates the investors, based on the answers to the question you have just asked. 

So for example if they have just said they like investing in companies operating in a particular sector for a specific reason, bring out those reasons during your pitch. Doing this will reinforce that you are a good match for each other. 

If, though, you find out through your open questions at the start of the pitch that you may not be the best fit for each other, or if their answers rang alarm bells for you, you can draw these out in your pitch and probe the investors further on them to see how they respond.

Many first time founders perceive an investor to be in the driving seat in a meeting, they after all you need their funding to allow their business to reach its full potential. But, the first meeting is as much about you finding out about the investor as it is about the investor finding out about you. 

Ask for feedback

After you’ve pitched, a good way to strike up a conversation with the investors is to ask them what they think of the opportunity, and if they have any specific questions. If they are not forthcoming you can ask them specific questions about what they thought about your business model, go-to-market plans, or if anything stood out to them that they would like further clarification on.

Be clear about next steps

As you are leading the meeting and as the founder driving your funding round, it’s important that you round off the first meeting with clear expectations, next steps and timelines. It’s likely that you will be asked to send them more follow-up information, possibly your “biz plan in a pitch deck”, or your financial forecast. Be clear when you will share this by, and suggest a date for follow-up meeting to take them through the forecast and answer any questions they may have after reviewing the document more closely. 

It's also important to communicate clearly what your timeline is, and when you are intending on closing the investment round by. Doing this will again build confidence with the investor, and help to build some fear of missing out on the investment opportunity.

If however you are struggling to secure first meetings with investors, it could be you’re giving away too much information about your startup too soon.

Top Tip: Send an Executive Summary or a teaser deck as opposed to a longer Pitch Deck to investors after a brief initial meeting such as at a networking or pitch event. An Executive Summary gives investors a flavour of what your startup is about, without revealing everything upfront which a pitch deck may. Quite often an Executive Summary acts like a hook or a teaser, and helps to secure the first meeting which is exactly what you want. The first meeting gives the investors a chance to meet the founding team, which is often what they are actually investing in when backing a very early-stage business, rather than the business idea. The risk of revealing everything upfront by sending a pitch deck is that an investor rules your business out before you get the chance to meet with them. 

We hope this has given you some food for thought and good suggestions for you to incorporate into your next investor meeting. 

If you are creating your Executive Summary make sure you include these eight essential elements to pique an investor's interest. 

If you are finding it a challenge to actually find investors, take a look at these suggestions from our founder community who found investors for themselves in these often overlooked places.

👋 Hi, I’m Hatty. I help founders raise their first or second round of equity investment in 90 days with the Focused for Business Funding Funding Accelerator programme. Follow me for posts about fundraising and equity investment.