Why Give a Damn:
Entrepreneurs that have or plan to have a meeting with a potential funder should read on. You will learn how to best prepare for a first meeting with funders, putting you a step ahead and increasing your chances of a successful funding meeting.
“Fortune favors the prepared mind.” Louis Pasteur
Meetings with potential funders are some of the most important meetings an entrepreneur will have in their lifetime. Unfortunately, most entrepreneurs don’t do the proper things to prepare. Proper preparation shows the funder the importance you place on the meeting and sets you up for massive success. This post is all about what you should do to adequately prepare for a meeting with a funder.
Research them (know your audience):
The need to research the organization you are meeting with should come as no surprise as a “must do”. Yet it is still astonishing to me (and to funders) that this remains something that many entrepreneurs either don’t do or don’t do well enough. And guess what…it shows up negatively in meetings!
So when it comes to the tedious task of researching the organization you are going to be meeting with, just do it. There is a strong correlation between how much you know about your audience and how successful you will be with them.
Beyond reading their website and their blog, take the time to talk to the funders’ past investees or other people who know the organization well. Look for trends in their investment decisions and things that are on their mind in their blog posts.
And don’t just focus your research on the company. Learn a bit about the person you are meeting with. Reading their company bio or performing a quick search on LinkedIn will go a long way.
Know the goals:
After you have researched this potential funder and have better insight into their organization, you can formulate some goals for your first conversation with them. Getting to know the person and their organization more intimately and getting them excited about what you are doing should always be initial goals. Walking away with a check should not be an initial goal. Let’s take it a step beyond that in your preparation.
Do they fund organizations like yours? If so, great. A goal should be keeping them intrigued enough to get a next meeting, maybe with some more key people on their staff. Get them answers to their questions and move this conversation forward.
Are you too early stage for them? Not a problem. A goal could be to get a better understanding of what you would need to do to get to a level where they would fund you, for them to point out some early holes they see in what you are doing, and to get some contacts of other potential funders of earlier stage companies.
Are you totally not a right fit (i.e. different sector, geography)? That doesn’t mean this meeting cannot have immense value for you. This person is connected to a lot of other funders and has seen a lot of deals – their insights and connections will be infinitely valuable. The goal should be to learn and to be connected to more of the right people.
Have answers to key questions (due diligence):
Every entrepreneur should be prepared to answer or address various questions and issues a funder will want to know about and may bring up before, during, or after a meeting. For example, who else is out there solving the same or a similar problem and how are you different? Does your product or service require certain licenses or permits and do you know what those are? If you take the time to have answers to these types of questions, you are in the top 10% echelon of preparedness.
Prepare to prove it (show, don’t tell):
You can say all the good things you want about your company, but potential funders are going to want you to show them as well. The more you are prepared to back up your statements with tangible proof that they are true, the more success you will see in your search for funding and the quicker you will see it.
Do you have a purchase commitment from a major client? Show me the email from them that says so. Are you about to launch a new version of your website? Show me the mock-ups of it. Are you hiring an awesome new CTO? Show me their bio and other things that prove to me they are joining the team.
Compile all of these things together in one place. Consider it your “prove it” folder.
The point here is not to come to the meeting, throw a bunch of documents down on the table, and loudly proclaim, “Look at how awesome we are! Don’t believe me, here is proof!” Instead, it’s to have at your ready those things that will help instill unwavering belief and trust in you and the amazing things you are doing.
Run mock meetings (practice):
No matter how experienced you think you are, take the time to have another investor (or even an experienced entrepreneur) run mock conversations with you. Have them ask questions as a potential funder would and play devil’s advocate and “non-believer” during the meeting.
If you take the time to do this with two or three (or five!) people before you begin meeting with funders, you are going to be light-years ahead of those who don’t.
An Unreasonable Challenge: Take Flight (act now)
Go ahead and get started. 1) Email 5 people who could help you run a mock funder meeting and schedule a time to meet with them in 5 days, then 2) Take 30 minutes to work on the due diligence questions and pull together some documents that prove what you are saying. This should get you started in the right direction.
(Please add more suggestions and experiences in the comments section below.)