I’m writing this post as part of my series with Advice on Raising Venture Capital but will file it under Sales Tips as well since it applies equally to both scenarios.
Congratulations. You’ve found a VC partner or principal who has invited you to the Monday partners’ meeting. Or on a sales campaign you’ve finally gotten your project sponsor to take you to the “executive committee” where decisions are made and budgets are agreed.
So you arrive at the meeting in the comfort that somebody has championed you to this point. Every 1:1 meeting you’ve had to date has been collegiate and productive. What could go wrong? A lot, actually. Here are some tips to keep in mind for the big day.
1. Information Asymmetry - The biggest problem that presenters face in large (5+ people) is information asymmetry. You come into a meeting where your sponsor (the person who invited you to present to the partners) knows a lot about you and the rest of the room may have varying degrees of knowledge.
This is true whether your at a sales meeting or at a VC firm. Sometimes a company presents at a partners’ meeting that has been well vetted and thoroughly discussed prior to the meeting so all partners know a great deal about the presenting company. Other times the partner wants to test whether there is support before sinking in tons of due diligence time.
Either way, don’t assume that the entire room is up to speed on your company. Also, you might be presenting your telecom company to a 6-person team where 3 people are telecom experts and the other 3 have only superficial knowledge. These kinds of meetings present challenges as some people want to go deep and others are at 50,000 feet.
Make sure you discuss this expectation with your sponsor before the meeting. Understand how knowledgeable the room will be around your industry and your product and importantly – agree a plan with your sponsor on how to play the meeting. Getting his / her buy-in to your approach is important as they can help you steward the meeting in the right direction.
I would normally recommend you address the issue early in the meeting with the group to set expectations. I would try a line like, “I know that some of you might be social media experts and others may be less deep on this particular area. My plan would be to start the presentation at the 50,000 foot view and then dive down to a more granular level once we’re all base-lined. Does that sound ok?”
This last question is important. You need to let the energy of the room guide you. If people want to go straight to details then staying too high level will also irritate people. But … watch out. If one vocal person blurts out, “just give us the details, we all know social networking” don’t assume that person speaks for the entire room. It’s a delicate situation but I recommend saying something like, “OK, that sounds great. Happy to do that. Just to check – does everybody feel comfortable going straight to details or does anybody want 2 minutes on the basics before our deep dive?”
I’m surprised in sales situations (and believe me, raising money is a sales process) how often the presenter takes direction from the most vocal person who usually speaks first. They don’t always speak for the group.
Regarding information asymmetry – take me as an example. I’m no dummy on businesses that are in the financial services sector, but my 3 partners have been investing in the space for 20 years so I’m clearly on a different level. 30% of our last fund went into deals in this sector. My partner, Brian McLoughlin, attends almost all Financial Services conference, makes a number of investments in the space and has relationships across the sector. His immediate focus when these companies present is an order of magnitude more detailed and knowledgeable than mine. In our current portfolio 3 or his 4 investments are in the Fin Svcs space. But when you present to both of us you still need to keep me in the dialog. Vice versa is it’s a SaaS platform company where I spent nearly 10 years running companies.
2. Scoring an “own goal” – The most common mistake is one I’d call scoring an “own goal.” It is when you’re in a meeting and somebody throws out a question that is a slight “red herring.” They were thinking of the question as you were speaking and they blurted it out. This happens often is sales meetings or VC meetings. Some presenters take that as a challenge to inform the person who asks the question about everything the presenter knows on that topic. What started out as an innocuous question asked purely out of interest can become a total time waster if it’s not pertinent to your storyline that you’re trying to convey.
I saw this happen recently with a VERY polished presenter (and somebody we’ve decided to take to the next stage so it obviously didn’t kill him) but he felt compelled to answer every question asked at great length even when not that important to the overall picture and it was quite distracting to the flow of the meeting.
Use the lesson I was taught many years ago: A, B, C (answer, bridge, communicate). Answer the question, bridge back to what you wanted to originally talk about and then get back to communicating your messages. Warning: you need to determine whether questions are really “red herrings” or truly something that the group wants to explore. If it’s the latter – you can’t move on. 2 quick tactics:
- it is acceptable to say, “did I answer the question thoroughly enough for you?”
- if you’re pretty sure it’s a Red Herring then simply say, “that’s a great question. Do you mind if I answer that a little later in the presentation? I have a few slides later that address that.” (obviously if you say that you need to come back to the question either later or after the meeting. tip: write it down when asked / parked)
3. The “Detail Merchant” – The third thing you need to worry about in a group presentation is the “detail merchant.” This is the person who wants to ask you the most detailed questions about every aspect of your business – sometimes details that aren’t relevant to the group getting a good picture of your market opportunity, your team, your competitive positioning, etc. Sometimes they do this out of interest, sometimes it is to show the group how smart they are and sometimes it’s just because they’re a nudnik. I’ve experienced this in many sales meetings I’ve made and unfortunately in many VC pitches I made.
These are the bane of many sales meetings but there always seems to be one – even when well intentioned. The problem with letting the detail merchant take over a big meeting is that they’re driving the meeting toward their agenda and not yours. More importantly, they’re often driving the meeting to an objective that doesn’t meet the needs of the other participants in the room.
It happens to all of us at VCs – usually in a mild, benign form. Sometimes I find myself really interested in the technical details of a companies product and after a few questions on the topic I look around and find my partners disinterested in this line of questions. Other times I find them wanting to know the details of one component of a business before I have understood the market landscape and I’m screaming inside my head that I want to understand the overall concept before the deep dive. It’s different than a “Red Herring” in that it’s not an irrelevant question it’s just that you’re getting too detailed before the group as a whole understands the complete high-level picture.
Whatever the reasons you need to be conscious of this. Here’s how to deal with it:
- first, you must always answer and acknowledge the question. Do this be repeating it and writing it down. “You want to know about the terms of the deal we signed with CBS and the reaction of their new VP. Let me write that down.”
- If you can answer at the highest level you should. “The new VP is very supportive of us – we’ve met him three times.”
- As with the Red Herring question you must “bridge” back on the main storyline of your presentation. You say, “It’s an important topic. If it’s OK with you I’d love to answer it in just a couple of minutes after the next few slides. I think the context may be easier. Is that OK with you?”
- That last question is key. If they say, “no, I’d prefer you cover it now” then you must. You can allow a detail merchant to drive you down 1 or 2 rat holes because you need to meet their needs. But you need to be sure that you’re not meeting their needs at the expense of everyone else. You need to have a relationship with your sponsor that after 2 rat holes you’ve agreed with him / her that he’ll help you bring the meeting back to a level that’s appropriate for everybody.
- If the detail merchant is really persistent you might try the line, “If you have a few minutes after our presentation or later today I’d love to come back and give you all the details you’d like. I have tons of information I’d be happy to share 1-on-1 with you.” Sometimes that works.
Allowing one partner or one executive in a sales pitch take you down a rat hole might ruin the overall flow of the presentation for the group it it’s entirety. As both an entrepreneur (in VC and sales meetings) and as a VC I’ve seen this happen many times.
4. The “Naysayer” – Another difficult situation you can run into is the naysayer. It’s the person who is always flinging out the skeptical question at you like, “Google could easily do this,” “how can you ever get mass adoption on a tool like this” or “not another social network – just what the world needs.”
Naysayers are difficult to handle because they set a negative tone for the room. I talked about a situation where this happened to me when I was raising money in Silicon Valley for my second startup.
I find with naysayers is to acknowledge the issue they’re negative but to not discuss it in depth. “I understand your concern about Google. It’s obviously something we’ve spent a lot of time thinking about as well. The short answer is, ‘we believe that our niche focus on backing up documents in the financial services sector will mean that their more generic approach of being a platform won’t be a competitive threat for the segment of the market we hope to serve’ but I’m very happy to have a much more detailed dialog with you at the end of the meeting or one-on-one afterward if you’d like.”
Please don’t get me wrong – some questions you will be asked that are challenging your business are totally legitimate and need to be discussed. I’m mostly talking about when you get what is clearly in your perception questions asked in a hostile tone or that sound negative / dismissive – especially if they persist from one single person. Judgment from you on the day as to which scenario it is will be very important.
If they persist the room will be aware of it and will start to discount the person as long as you handle it professionally. Unfortunately if you “take the bait” and seem defensive it normally just makes both of you look bad. The other great thing about the “cover it later” approach is that it gives you an excuse to all on this person later one-on-one afterward and build a relationship. Why not follow up after the meeting and ask whether you can come see him directly to show him some data you have. Any excuse to build a relationship with the naysayer and turn a negative into a neutral.
But the overall advice is similar to the detail merchant – you can’t let the naysayer take your agenda off course or everybody else – including you – loses.
5. The “Silent Partner” – The final mistake that I see many people make is not engaging the “silent partner.” Just because somebody doesn’t speak up and challenge you in your meetings doesn’t mean that they won’t be against your company / idea when the internal discussion happens.
As a sales person it’s your job to flush everybody out and find out what their thoughts / feelings are. In a positive way, of course. The best tool for engagement is the question. If you notice a partner that hasn’t spoken or seems to not be paying attention (hopefully not on a Blackberry!)? Get them involved!
Find a way to ask them a pertinent question and ask for their point-of-view. “Bob, if I’m not mistaken you have some experience in social games through your involvement with EA. I know that mobile is slightly different but how do you see this space playing out?”
Work the room, folks. Whether in sales or in raising VC these are often group decisions. You need everybody engaged, everybody knowledgeable about what you’re doing and you need to get all issues / risks in people’s minds out on the table and in the open. This will only happen through your asking questions, listening to what each person is saying, writing down key notes and testing with the group whether you have understood all of their concerns.
I was recently in a meeting with a company that had met 2 of my partners twice before our meeting so my partners’ knowledge was already much deeper than mine. I didn’t ask any questions in the meeting because they were already going too deep relative to my knowledge. After the meeting the CEO came into my office and asked if I had 5 minutes. We spent 30 minutes together. He got all my issues on the table. I thought, “brilliant.” He gets it.
Information asymmetry, detail merchants, naysayers and silent partners are all potential landmines. You’ve got to learn how to deal with group dynamics to avoid presentation rat holes. All that said the next step is the most important.
6. Pre-Meeting Prep – So much of your performance in the big meeting is tied to the preparation you put in before hand. It’s so important that it’s going to be the topic of an entirely separate post. But for the sake of completeness in this post – before you arrive at a big meeting you need to know in advance: who will be there, what their views are, how they normally act in meetings, what the relationship is between individuals and whether they’re knowledgeable about your space. Just winging it on the day is a much lower probability outcome.
You can only do this if you have a “champion” on the inside. Make sure you’ve spent enough time with your sponsor in advance of the partners’ meeting that you feel confident they’ll advocate for you on the day. One sign of whether they’re truly supportive is how well they help you prepare for the big meeting.
