It is Crunch Time, Will You Pass the Interview?

So, you’ve had an idea for a product. You believe you have a solution to a real problem you have identified in the marketplace, and you have taken the next step and developed what you feel is a minimum viable product to meet this need.

Furthermore, you have some initial market validation as you have sold your product to some actual customers, and they have liked it and reordered it — demonstrating that you have some sticking power.  You have reached a tipping point in your evolution; it is time to approach investors and raise capital to commercialize your product on a much grander scale. Will you pass the interview?

When approaching investors to raise capital for your company, there are many similarities between raising money and interviewing for a job. Think of the investors as being the head of HR, and think of yourself as being the interview candidate for an open position. If you are like most entrepreneurs, you likely go into the meeting being very positive and full of enthusiasm about your opportunity, and this no doubt is a good thing.

What you need to keep in mind however, is that the possible investor, much like the HR manager, initially is not looking for reasons to hire you — but rather are looking for reasons to disqualify you!

Yes, they are initially looking for any red flags in your presentation or in your executive summary to indicate that you or your opportunity are not yet market-ready, and they are best served by giving you a “thanks, but no thanks” response. There are some common mistakes and important aspects in the process that you can avoid with a little attention to detail.

Let’s take a look:

Executive Summary. The executive summary is often the first exposure the prospective investor will have to your opportunity and, as such, it is your chance to make a good overall first impression.  Remembering the old adage that you only have one chance to make a good first impression is advice to take seriously.

Your executive summary is basically your company’s resume. It should be one page, clean, crisp and to the point. It should offer enough factual information as to the real-world opportunity, the size of the immediate market your product addresses, the larger market potential that you may be able to reach over time and your ability as a team and a company to successfully capture that market.

It should address all pertinent information demonstrating your current position as a company and your readiness to take this next step. It should also list all key players on your team as well as all external support people you are working with.  The external personnel include those individuals handling your accounting and tax filings, legal representation, intellectual property rights, along with your advisory team and or board members.

The vital thing to keep in the forefront of your mind is this one page will demonstrate your professionalism (or lack thereof). If done correctly, it will exude professionalism, succinctly provide all pertinent information and leave the reader wanting to know more. It goes without saying there must not be any grammatical errors or inconsistencies within the document in terms of font size, spacing. etc.  Remember the investor, like the HR manager, is looking for reasons to deep-six your opportunity. Don’t give it to them!

PowerPoint Presentation. Let’s assume that you have done a terrific job of putting together a top-notch executive summary and you have passed the first test. You have been invited to share more information with the prospective investor. This will often take place remotely via a Skype or webinar presentation. The same basic criteria that was used in developing the executive summary also applies to the PowerPoint presentation: it must be clear, concise and consistent. Once again, you must remember at this stage they are still looking for reasons to disqualify you from further consideration.

One of the most common mistakes I have seen in the PowerPoint presentation is a lack of consistency. Attention to detail is paramount to your success. I have seen in a single presentation three different figures listed as to the dollar amount that the company had claimed to have raised thus far. A prospective investor has three options here. They can either assume that two of these numbers are typos, they can assume that perhaps this is the progression and timeline of what was raised, (this was not spelled out) or they can simply disqualify this opportunity as not being professional enough to warrant further consideration.  Time is of the essence to prospective investors.

I spoke with a managing director of a venture capital firm, where their employees review 45 investment opportunities every quarter. On average, this firm only invests in two a year, which highlights the fact you have one shot at getting things right and grabbing their attention. They simply don’t have time to give you the benefit of the doubt when they spot inconsistencies or errors in your presentation.

Don’t give them reason to dismiss you; pass that interview!

For additional insight on this topic, you may be interested in the following article:

https://www.surveygizmo.com/resources/blog/how-to-write-executive-summary/