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Investor roadshows: Set yourself apart with one question.

Investor roadshows: Set yourself apart with one question.

Roadshows always look like this.

 

Most roadshows that I’ve witnessed all follow a similar process. 

 

(1) Introductions.

“Hey, nice to meet you again”.

(2) The pitch.

A pitch deck comes out quickly and the MD starts into the pitch. There’s usually reference to where things left off, or if the investor is a shareholder or not. 

 

But otherwise, 95% of that pitch is identical from investor to investor.

(3) The questions.

Every investor has a variation of the same two questions.

“What newsflow do you have coming up?” and “When do you need to raise?”.

 

And it’s on you to give them the answers they need, right then and there.

(4) The dance.

 

“No...no, this is a non-deal roadshow,” you say out loud to the smirk of everyone in the room. Then you start talking about upcoming news - “We have the money for now but we’ll raise it in time… unless there’s an opportunity before" etc.

 

Nobody gets what they need with this process. 

 

You don’t understand what you need to do for your investors, and your investors don’t get any reassurance about why they should invest in you now, or in the future.

 

Let's change the process.

 

Here’s my pitch for an alternative to the ‘cha-cha-cha’ that most companies do.

 

But I’d suggest trialling this on an investor that (1) you already know, (2) has a decent grasp of your business and (3) isn’t a current shareholder.

 

(1) Introductions - This remains the same.

“Hey, nice to meet you again”.

(2) Asking the question - You take the initiative here.

 

“Dave, you already know us well enough and I’d like to have you on the register in some shape or form. What would need to be true for you to invest in us?

 

Then do nothing but shut up, and take notes. Do your best to not immediately answer anything. If you must open your mouth, only do it to ask “and what else” until they’ve said everything they need to say. 


Now you’ve got your hurdles. You’ll know immediately if you can unblock what’s stopping them from investing, or if it’s something you’ll need to work on, and that changes the whole dynamic of the meeting.

(3) The pitch - You change your pitch depending on the feedback.

 

Here are 3 examples based on three different feedback scenarios. 

 

“You’re too small for our mandate”.

“Thanks for letting me know. What are your minimum hurdles, and where do you like to enter? I believe we’re on our way there, so how would you prefer me to keep you in the loop, so that you know about us as we enter the mandate?”

 

“The opportunity/project/traction needs to be bigger/faster.”

 

Now you know exactly where you need to focus the attention of the pitch and which aspects require more detail and context on why they may be bigger than they appear now.

 

If you had some flexibility and movement here, would that change their mind?

 

“Your cash looks tight and we want to make sure you’re well capitalised”. 

 

“Great, let me go over the highlights of how we’ve been spending our funds and our capital raising plan. If we were to raise and you were to participate, would you prefer to work through a broker or directly? What’s the range of investment you’d normally make into a company our size?”.

 

(4) The dance plan - Now there’s no need to dance around things.

 

You’ve got all the information, context and input you need from your investors to be direct. 

 

When is the next time to check in? How do they prefer communication? What triggers or levers are there that will change their view on the business?

 

It’s all useful to you and your investors in building that next step to join the registry.

 

So give this alternative approach a try on your next “non-deal” roadshow and let me know how goes. 

 

It’s going to give you a lot more information and control and might be the difference between another pitch to an indifferent investor to creating a relationship that results in a new buyer.

 

Cheers,

Ben

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