9-Point Prep List For Meetings With Investors

Once you’ve decided it’s time to start meeting with investors, you will want to check out the items on this list to be ready to have productive conversations:

1. What’s your “secret ingredient?” Investors will be eager to hear what’s different and valuable about the product or service you’re bringing to market. Make sure to have a good description that tells your story without giving away any proprietary details.

2. Get key deals in writing. If you say one of the keys to your success is a strategic alliance as, for example, an IT partner, it’s better to have a deal already signed with someone before talking with a VC.

3. Offer vendors non-cash incentives. Some vendors might give you a better rate on work if they can see it as a business development tool for them. So, it would be good to have some users signed up and using the system — even on a trial basis — before finalizing a deal with a strategic vendor.

4. Don’t hold out for a non-disclosure agreement. Most VCs and angels will not want to sign an NDA. Check people out on LinkedIn and other social media to get a feel for their trustworthiness.

5. Potential questions from VCs. What are your margins? What are your revenues and are they growing? What percent comes from various sources, for example, consulting and service work vs. licensing? In valuing your company, an investor might apply different multipliers to segments of your revenue — for example, a 2x multiplier to the consulting component and a 5X multiplier to the licensing revenue.

6. How much would you like to raise? Even if you go for up to say $200K, that’s still more in line with what angel investors are looking at. Institutional VCs are looking to fund larger amounts at a time. If the maturity of your venture doesn’t seem to warrant their minimum deployment, one response you might get is “It looks interesting. Come back to see us when you get more customers signed up and some significant top-line revenue is being generated.”

7. Identify some VCs you can start a dialog with. But remember their time is extremely valuable. They have to look at a lot of deals to dig into a few to close one.

8. Be ready to answer ask for and accept business consulting help. Keep in mind that most investors will be very proactive in asking questions and offering assistance along the way. They want to hear about your problems as soon as possible. Some angels have people from your industry who took early retirement and are looking for projects like yours to work on.

9. Be smart and honest. Those are the two most important things an investor will look for. Smart translates as “Do you know your business and what you’re trying to do, and “Do you have the personal brain capital to get it done?” Honesty means a lot more than just “no lying or cheating” but more like: “Can we count on you to be forthright and clear about the status of the project?” and “What are the problems you’re facing now and the ones you see on the horizon?”

It’s going to be critical to tell your story. Going through this checklist will help you let investors know who you are, what you’re trying to do, how you’re solving a critical problem in the marketplace in a unique way.