"Family and friends" investors may not be particularly
demanding. But serious angel investors - and professional
investors - set the bar high when they're evaluating your
business idea.
Check yourself for these five common errors when pitching
your business to potential investors - and if you're still
wondering,
email us your presentation and we'll give
it a quick look-see for you.
1) Educating for too long on the obvious
Just about everyone's heard that obesity and inactivity are
huge problems. You don't need to waste 15 slides and 15 minutes
showing potential investors the CDC's time-lapse US map showing
that everyone's getting fatter and fatter. We get it, OK?
Much better: tell a quick story that helps your potential
investor instantly connect on a personal level with the health
or wellness problem your business can solve. Then put numbers
around the size of that business opportunity.
2) Skipping the hard parts
We've seen many presentations that say something like "Our
product is so innovative that it
is only a matter of time before this
revolutionary approach to wellness is widely accepted."
One of the most important questions that
investors ask is why customers will choose your product
or service, and how quickly they'll adopt it. Don't fall
into the trap of answering hard questions with lightweight,
fluffy responses.
Instead, lay out the specific facts and
figures:
"Women in their forties will choose our
weight loss program because we give them only one new lifestyle
change to master each month and let them eat their favorite
foods, unlike the X, Y, Z programs that overwhelm them with
lifestyle changes and forbid favorite foods."
3) Failure to provide proof
Spell out the facts that build your case. Potential investors
won't take things on faith.
For example, don't simply say that you have a "great
management team". Instead, highlight their accomplishments and
credentials and your audience can draw its own conclusions.
Instead of asserting that "many customers will find our
service valuable", explain that over 100 parents attended your
recent seminar on kids and obesity...and 40 of them signed up
for your Healthy Kids/Healthy Families program.
Perhaps you want to make the point that your wellness program
is medically-based. It's fine to say that - and it's truly
compelling and believable if you can back it up with, say,
endorsements from five local physicians.
4) Death by PowerPoint
We've seen investor pitches to health and wellness investors
that ranged from 15 to 90 (!) slides. Keep in mind that most
investor meetings are 30 - 60 minutes total. Your actual
presentation material should not exceed about twenty minutes,
leaving the remaining time for questions and discussion. So for
most wellness businesses, that usually means only 10 - 15 actual
slides.
Use the 6-6-6-6 rule for slides you use when
you present live to potential investors:
- No more than six words per bullet point
- No more than six bullets per page
- No more than six text slides in a row
- And the point of the slide has to be clear in no more than
six seconds.
Now, if you're sending slides to an investor who'll review
them without your being present, you need a different (and
longer) set of standalone slides that spells out your points
more explicitly. However, these slides still need to pass the
six-second rule.
What not to do: one of our clients had a slide with a graphic
containing fourteen different elements. They always introduced
it by saying "Now I know this looks scary, but...".
Well, if it looks scary, change it!
5) Talking, not listening
Last, listen. Listen hard. Watch for physical cues of
interest or boredom. If you're presenting by telephone, pause
frequently and invite questions and comments so that listeners
can break in. It's very frustrating for a potential investor to
keep trying to ask a question that you never hear because you're
talking continuously.
Take questions as you present, rather than asking listeners
to hold them to the end. After all, you want to know immediately
if there's an early disconnect.
Red flags:
1) You always get the same questions at certain points in the
presentation.
Your presentation probably omits something out that you should be
addressing explicitly.
2) Investors always want to talk now about points that you
plan to cover later in your presentation.
This behavior is often an indicator that you're spending too
much time describing the public health concern (obesity
epidemic, for example) and not enough time talking about how
you'll capture the business opportunity.Consider rearranging your key points, or simply shortening
your introductory material.
