So you're in the room with people who could potentially, not make or break your business, but greatly influence whether you are a skyrocketing success or merely a marginal also-ran. What do you say? What do you not say? How long should your presentation be to your investor audience?
Unlike working in your garage or slaving away in your makeshift cubicle, every move you make in an investor presentation is public, being scrutinized and people are listening for holes. It's nerve-wracking, but also a fantastic opportunity for your business. Since Inc. Well is all about being a resource for budding entrepreneurs, it's a little surprising we haven't touched on this topic before. Well, all that changes now. I gave Flip Filipowski, chairman and CEO of Silkroad Technology (a solution suite offered to HR folks wishing to empower employees to engage them in their business), a call to change that. We covered the hiccups, pivots and troubleshooting that needs to happen in investor presentations.
What do you cover in an investor presentation?
Flip Filipowski: I try to give them a very good picture of the business. The concentration of that would include the management-team description, the secret sauce that an organization thinks it delivers to the marketplace, a profile of its finances, and its expectations.
What should you not cover?
Flip Filipowski: I wouldn't cover anything long and laborious and boring. I suppose people usually react to it like they do to a lot of conversations. In some cases, they do get bored to the point of tears and in others they get excited about the opportunity or what they're hearing. I think not elaborating adequately on the objectives of the business, especially in the objectives that the management team wishes to reach for its shareholders.
Any other, more specific advice?
Flip Filipowski: Understand that your audience has not lived your business. They know probably less than you think they know. They are, perhaps, not astute about the technology and need a Guide for Dummies to your business as opposed to delving immediately into the technical details of the strategy of the product. There's a way to present it as secret sauce without expecting comprehension. I think a great quote that I would have is you pretty much can explain it to them, but you can't comprehend it for them.
What about what happens after a presentation? If they turn you down or choose to take you up on it, what happens from there?
Flip Filipowski: I think what they normally do is they collect enough information, both from the presentation that you give and then from the typical group of individuals they seek counsel from. They have some advisories or some people who are available to them that have supposedly finger on specific markets that you address. So they may go to one or two or three of these folks -- obviously not the same ones, depending on the segment that your business addresses. They come to you at the end of the presentation with probably a reasonably mellow complimentary set of comments, seek to do a little more homework and if they are like a typical funding group they have their meetings on Mondays. One of the subsequent Mondays they present a case. The advocate for you will probably be one of the folks that was in the presentation, depending on whether they're a senior person in the firm or a junior person in the firm they carry a different amount of clout. Depending on their express to love for your business, ability to present it in a way in which they inform the rest of the funding partners that they're willing to stake their reputation on the business you presented and how much clout and experience and success they've had in the past will go a long way towards determining whether or not the group will allow a follow onset of due diligence efforts. Once they turn that clock on they're starting to spend money to evaluate your business, and they don't want to get pregnant with that cost because if they don't chose to invest in your business they have to write it off as an expense. If they choose to invest in your business they attach it to the investment criteria.
If they decide to pass on the opportunity, obviously this is a blanket statement, but is it worth trying them again after a certain amount of time? Or is it usually best to just move on?
Flip Filipowski: At first glance, the advice of moving on seems appropriate, but if you can it would be worthwhile what it was that they found unattractive and if they had some specific hole they thought they uncovered. They're usually reasonably good at that, and you may find that the timing wasn't right. You may find that they were working on another set of deals and asking in some form or fashion for advice that may include: "Should I present this to you guys when you're less busy?" Being careful that they don't give you a yes just to get you off their plate. On occasion, there is a good reason to bring it up. It may be that events in the field, in the stock market, the ideal market, all lean towards your business and they regret that they made a pass and it's possible to get a second shot. It's usually best to pursue a new opportunity but it still pays to get a semblance of input from the folks who just rejected you to find out if you can do something of a repair job in the presentation and approach to the next and subsequent audiences.
Is it unwise to make compromises based on an investor's reservations?
Flip Filipowski: Maybe. And I would say if it allowed an investment to occur from a brand venture capitalist like Sequoia, let's say, that some modification of the approach, even if superficial, might be worthwhile because getting money from certain kinds of VCs makes the difference between success and failure just in the form of the reputation that follows their investment.
David Wolinsky is a freelance writer and a lifelong Chicagoan. In addition to currently serving as an interviewer-writer for Adult Swim, he's also a comedy-writing instructor for Second City. He was the Chicago city editor for The Onion A.V. Club where he provided in-depth daily coverage of this city's bustling arts/entertainment scene for half a decade. When not playing video games for work he's thinking of dashing out to Chicago Diner, Pizano's, or Yummy Yummy. His first career aspirations were to be a game-show host.