Investor meeting tips
For many startups it’s impossible to grow without an investment from an angel investor (informal investor).
Getting an investment from an angel investor is an exciting process, which usually requires several meetings. It starts off by sending the angel investor your pitch deck. If the investor likes your concept, you should be able to get the first investor meeting.
Here at PitchSkills we’ve been to many investor meetings and here we’ll share the most important investor meeting tips.
First of all, the goal if your first investor meeting is not to get the investment.
It rarely happens that you close a deal with an investor during the first meeting. Usually it takes a few meetings to discuss everything the investor wants to know. Therefore, the goal of your first meeting is to get that next meeting.
´The goal of your first investor meeting, is to get to the next meeting’
The 12 things you should do for your next investor meeting:
- Do your homework
- Have your documents ready
- Prepare for tough questions
- Send a teaser or your pitch deck up front
- Be on time and be well dressed
- Know your split
- Know where the money is going
- Be open for criticism
- Be honest about everything
- Sleep well
- Don’t ask stupid questions
- Follow up
Without further ado, let’s get into the investor meeting tips.
#1 Do your homework
When you meet an investor, it’s important to know more about the investor’s background. Use Google, LinkedIn and Twitter to learn more about:
- The area of expertise of the investor
- Previous companies the investor worked in
- Companies the investor founded himself
- The interests and hobbies from the investor
#2 Have your documents ready
If you want to impress an investor (you should), you should have all your documents prepared. Documents you should prepare:
- Pitch Deck
- Business plan
- Resumes of your team members
Probably you won’t discuss of these document during the meeting, you might not even discuss one of them. However, when an investor wants to know more about any of these documents, it looks really sloppy if you don’t have them.
If possible, print all of these documents and bring them to the investor meeting.
#3 Prepare for tough questions
Investors are usually smart people. Quite often, they have founded companies themselves and they know what they’re talking about.
Because of their experience they’ll have an easy time to spot the weak points in your business concept. When they do, be prepared for tough questions on these weak spots.
You must realize that it’s their own money they’re investing, so they want to know every detail about your company before they invest.
#4 Send a teaser or your pitch deck up front
Before you meet with the investor it’s recommended to send a pitch deck or a teaser up front. Not only does this help the investor to understand what your startup is doing, it also increases the quality of your meeting.
#5 Be on time and be well dressed
This is an easy one, but some entrepreneurs still forget it. Never be too late for an investor meeting and never be under dressed. This doesn’t mean you should be in the most expensive suit you got, but at least go for smart casual.
#6 Know your split
Investors are always interested in the division of shares within your startup. This is because they want you to have a fair amount of shares. Why, you ask?
Investors hate when a company gets a few rounds of investments and the founders are heavily diluted. Their biggest fear is that you have little shares left and you are unmotivated to work for your own company.
#7 Know where the money is going
Let’s say your company is looking for an investment of $250,000, -. Being an investor, you want to know where this money is going. Is it going to sales and marketing? Or does 80% of the money go to ski trips and a fancy office?
Present the investor with a nice overview of how you’ll spend the money. If the investor asks for it, you should even be able to explain how each budget (f.e. marketing) is divided.
#8 Be open for criticism
For many entrepreneurs, this is a tough one.
Your startup is your baby and you hate it when people are ‘negative’ about it. If that’s the case for you as well, I’m afraid I have to warn you:
Investors will have criticism.
If that’s the case, don’t worry, it means they’re being honest. If they wouldn’t share any criticism at all, it would mean that they’re not interested and want this meeting to be over with as soon as possible.
´It’s great when you get criticism from an investor’
#9 Be honest about everything
When you’re an entrepreneur, it’s tempting to make your company look a bit bigger than it actually is.
Please don’t do this, the investor will find out.
When the investor decides to invest, most likely there will be a due diligence. In this case, they’ll get to know all the ins and outs of your company. If it turns out you have been lying about certain aspects, this could break your deal.
´Never lie to an investor’
#10 Sleep well
Investors are smart people and they will fire tough questions.
If you’re in the investor meeting and you’re feeling sleepy, there’s a high chance you’ll screw it up. Investor meetings intensive and you better be prepared for it.
#11 Don’t ask stupid questions
When you’ve signed a deal with an investor, it’s okay ask (personal) questions. However, when you’re in the first few meetings, stay away from asking stupid questions. Thins you should never ask during an investor meeting:
- Don’t ask the investor about the size his fund
- Never ask an investor to sign an NDA
- Don’t ask the investor how long it will take to close a deal
- Don’t ask the investor for his opinion on your company
- Don’t ask the investor about other investments
Of course, when the investor starts about on one of these topics, it’s fine to talk about it. Just be sure you’re not the one to bring these conversations up.
#12 Follow up
After you’ve had the first investor meeting, it’s time to follow up. There are a few ways of doing this:
- Connect with the investor on LinkedIn
- Send the investor an email
- Give the investor a call
All of these ways have one goal, which is to get to the second meeting.
Good luck with your second investor meeting!
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