Congratulations! You’ve made a good first impression in your first encounter and you are invited to present your business story in further depth. You have now the full attention of your potential investor for an hour or two.
#1 — Don’t claim victory too soon
On a second date, you realise that the possibility of intimacy may start to creep in. You’ve been over surface-level conversation and this one could form the precursor of a long-lasting relationship. However, do not act like you are a couple yet and start immediately talking about a future commitment. Don’t put the cart before the horse and risk to scare-off your crush. Let the tension build first. A second meeting does not signal you might receive a term sheet.
#2 — Raise-up your game
In reality, this is your chance to give the investor a far better insight into your business and to truly figure out whether the dialogue is worth pursuing. Like in dating, you are taking a step closer towards knowing each other better and will find out whether you’re compatible. You will need to elevate your conversation and go beyond the generic small talk.
#3 — Treat your second date as your first one
As intimidating as it can be, you do not know each other yet and are not emotionally invested in any relationship of any kind. In other words, you do not have much at stake. So do yourself a favour and drop all expectations before kicking-off the dialogue. You are still moving within the discovery phase of the courtship process.
#4 — Walk through your agenda
While every date is different, it usually follows a general pattern. In the fundraising scene, you will present your business story in a sequence of highlights that will need to be told in the right order.
Investors usually allow you to lead the conversation and kicking-it off by outlining an agenda. There are no clear-cut rules as to how you walk them through your schedule, but you would want to check-in time to time with them to fill-in the gaps.
#5 — Leave the door open for questions at all times
Allow tension to ebb and flow and don’t make it too relentless, as they may want to discuss a particular point in more detail with you. The most memorable fundraising meetings flow like a river. With a few bumps on the way, those conversations turn along the way and keep flowing down their channels.
#6 — Storytelling is story-boarding
Overall, the objective is to describe where you are today, what you’ve learnt in the past and what you will focus on validating in the future. Investors would want to hear the milestones you’ve achieved and the next ones which follow. Be able to back it up with precise numbers to show that you have a clear strategic view on how to grow your business.
When your storytelling turns into a conversation, this means your counterpart is deeply engaged with you. If you reach this point, forget your pitch and leave the chemistry doing its work.
#7 — Do not underestimate Juniors
If you find yourself pitching to a Junior, it only proves you are at an early stage of your courtship. Do not underestimate those type of meetings though. You will need to show strong transparency and be very clear in describing your business. Be mindful, that the Juniors often play a role as first-filtering for their firms and might only have a few minutes to summarize your business story to their broader team or partners. Make their life easier and simplify your story so they can best represent you.
#8 — Do not forget to do your homework
Come prepared with some questions in your back pocket, suggest your interest but as in the dating arena, do it with elegance. Learn about their fund size, life and stage. Understanding how much capital and how many years are left before they raise another fund is essential. You would want to figure out how much time you will be given to grow your business before your investors starts thinking about an exit and realizing a return on their fund.
#9 — Step-up your relationship
Finally, it’s time to take your date to the next level. If you want this to end up somewhere, you will need to step up this relationship from a casual dating to a fully-fledged relationship. While you still find yourself in the initial stages of dating, you want to agree on next steps and arrange for next meeting. Let’s build-on the excitement of the first interactions.
Do no risk embarrassing your crush though. Do it in a subtle way, trying to obtain their first sentiment on your overall market or strategy. By making visible the invisible, this instant feedback will reveal some useful insights about her/his interest in your business. It also keeps your date on her/his toes.
You can also ask if they’ve spoken to or invested in similar businesses recently. This could tell you whether they may have a genuine interest in you. And eventually, it will get your date to pitch her/himself. It gives you more value, get her/him to think about next step and put you in a stronger position to reflect on whether this is a good match for you. Handling this approach with tact also demonstrates confidence and unflappability.
Deepen your connection, reverse the roles and agree on next step.
This is the 5th of a series of 5 articles on fundraising: