The magic formula of fundraising

Hello! This is Irino, a strategy consultant. Every year, I review more than 100 business plan documents and participate as a judge for business plan contests.

I have summarized the important points to remember concerning how one should approach giving presentations for fundraising and explained them in detail.

The contents of fundraising presentations

The contents of presentations are the same as the table of contents for business plan documents.

Executive summary
Background
Management team
Company overview
Management and business principles
Product/service overview
How your profits are made
Analysis of the market and the competitors
Marketing and sales strategies
Operation plans
Personnel strategies
Start-up strategies
Growth strategies
Exit strategies
Financial plans :
– Sales forecast
– Cost plans
– Financing forecast
– Capital policies
Risk management
Project management

Do’s & Don’ts for Beginners

■　Understand the real reason why they get nervous about giving presentations

There are some people who get overwhelmed by the stress and tension because they are not aware of why they get tense in the first place.

Type 1: Caused by lies and deceptions
People who try to tell lies or deceive others would get nervous. It is common for venture companies to have some weaknesses or negative aspects. So, try not to hide and lie the unpleasant information. Banks and venture capitals are professionals and even you fool them in the beginning, they will find out at the due diligence phase.

Type 2: Caused by trying to overly show off
I have seen dozens of presentations given by business managers. I have never seen presentations that have a wide gap between the presentation and the actual contents of it. If its contents are great, the presentation could be great too. You might want to expect your presentation to be a little bit more decorated than what it actually is.

Type 3: Caused by worrying about getting nervous
Many people get trapped in this vicious cycle. It is true that if you get nervous, you can’t do your best and the presentation might go wrong somehow. However, I have not seen that many people who had failed completely just from getting nervous.

Also, it is important to be somewhat nervous. Getting nervous is a good indicator that you have respect for the capitalists. Especially young capitalists tend to favor those who become nervous. I believe you can even pretend you’re nervous.

■　Don’t ask consultants to do presentations

Sometimes, there are people who ask me to do the presentations for them. It is my policy to refuse all offers of that nature. Consultants may be good at giving presentations, but the presentations would not be really convincing unless they are given by business managers who actually are in charge and responsible for the business plans. Investors are investing their money not to consultants but to business managers.

Do’s & Don’ts for Intermediate Entrepreneurs

■　Don’t tries to give the presentation only by yourself

The business manager should not give the presentation all by himself when there are about 5 people hearing it. One of the reasons is the physical power balance. Factors like the number of people or one’s body size often determine whether the negotiation would succeed or not. Like how lawyers who are professionals of law are told not to go to gang’s office by themselves, no matter how great the logic of your business plans may be, it can be completely disadvantageous when you’re in one-to-many situations to negotiate. The other reason is because it is more credible if a third person compliments the manager how qualified. It is somewhat unnatural for the business manager to compliment himself.

■　Don’t fears silence

There are some people who speak too much to avoid silence and this often leads to lower evaluation. By way of experiment, try to shut your mouth for 3 seconds. 3 seconds may feel like eternity to the presenter himself, but listeners don’t really mind it so much.

■　Don’t get tired and bored of speaking about the same thing

Usually, presenters would have to give the fundraising presentation to more than 10 companies and they have to do the same presentation many times. Therefore, they become tired of the same presentation and finally fail to emphasize the important points. It is significant to repeat the important points in the following manner.

【What you want to say】⇒【Explanation and examples】⇒【What you want to say again】

Each listener is an important investor, so make sure you do a good presentation each time even if you’ve given it a number of times already.

■　Look at the listeners carefully

Presentation is not a one way communication. It is the first step of negotiation.

Not looking at the listeners’ eyes
Not remembering on which page or when your listener took memo
Missing out when the listeners seem to want to ask questions

I come across cases like these occasionally. If the presenter is not able to observe the listeners from being overwhelmed or nervous, then the person in charge of following should carefully observe the listeners.

Do’s & Don’ts for the Master Class Entrepreneurs

■　Be aware of the objectives of your presentation clearly

There are different purposes for fundraising presentations.

only to let investors know about your company, products and business models
to have the person persuade in-house investment committee
to get ideas from investors in order to brush up your business plans

Some experienced presenters change the contents of their presentations easier for a young listener to write a report which he will submit to his superior corporate officer. Other experienced presenters understood immediately that listeners’ purpose is to get as much information about capital policies from finance specialists, then decided to hold a free discussion instead.

You should consider

how you want the final condition to be when the presentation is done.
what is the next action to take once the presentation is finished.

■　Realize the first 10 seconds will determine the investment

For some reason, the success of your fundraising presentation will be determined by the first impression. Even if you have second or third meetings, you will somehow only get funds from those who had good first impressions. The first meeting is really important and severe because if you do fail, then you can’t mend it. That’s why it’s a great opportunity for experienced presenters.