Written By: Dan Dragicevich
When it comes to the first investor meeting most founders focus on the business pitch. I mean, why not? The whole point of the first meeting is to convince the investor to invest in your business, right?!… WRONG!
The goal of the first meeting is to get a second meeting. On average it takes 7 meetings from the first meeting to the term sheet – that doesn’t include the numerous emails and side conversations. Every founder should remember this and be careful not to forget that one of the most important parts of an intro meeting is the last 5 minutes. So, how do you make the most use of the last 5 minutes of your meeting? Let’s get into it…
The last 5 minutes of the meeting should be devoted to clearly understanding their process and where you stand with that investor in said process.
Step 1: Thank the investor for their time and pay them a compliment. Simply thanking the investor does two things. It shows that you’re polite and respectful, and maybe more importantly it provides an opening to ask a tough question. If you ever want to ask someone a question, pay them a compliment first and you will get an answer every time!
Step 2: Ask what their investment process is like and if they see you fitting into it. This is why you thanked them because this question usually requires a bit of prying on the founders’ end. Generally, when an investor gets this question they will provide an ambiguous answer that lands somewhere in maybe-land. In order to get out of that it is your job to pry just enough to get them to either a yes or no without poking the bear too much. Although it can be uncomfortable, the last thing you want is to leave that meeting still residing in maybe-land. If you do find yourself there at least establish a clear timeline of when you should follow up with the investor if you haven’t already heard back.
Step 3: Ask which areas to focus on moving forward; make them an advocate. You want to be as prepared as possible for the next meeting (whether it’s with this fund or not) so don’t let them leave without asking which areas of the business are the most important to focus on or what you could do better. This will show the investor that you are serious about the next step, you’re coachable, and it will provide insight into how their fund evaluates companies. It will also alleviate any remaining tension from the previous conversation… PHEW!
If you are looking for more info on investor meetings, be sure to check out my previous blog “The Art of the 30-Minute Investor Meeting.“
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