How to choose an investor and present a project to him: checklist, rake and delusions

Approximately the investor sees startups before the presentation. The presentation changes everything ... or not.

Three main investor questions:

• Where is the money in this project?
• Why do I need here?
• Ok, now why do you need you here?

More investor is not interested in anything. It is clear that each question is divided into dozens of clarifications, checks, and so on, but if you can clearly and clearly answer all three questions to an investor, the project will be launched.

It is very important to understand that the second question is the reason for dropping out most of the projects. An investor is not a wallet, but a company that has its own specific goals, and therefore the choice of the right investor influences the project no less than the idea itself. There are three types of investors: business angels, strategic investors and venture capital funds.
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Who are business angels?

These are investors who give not very large investments (up to one hundred thousand dollars), but give quickly, and, more importantly, at the stage when it is completely unclear what will happen with the project, that is, in conditions of high uncertainty. They look at the idea, evaluate the team (often - semi-intuitively), think how well they can succeed. Often, such people, because of their business experience, act as mentors or project consultants. Interestingly, the investments go precisely to a well-coordinated team: after all, the train of thought at the “there is not even a prototype yet” stage can turn 180 degrees and lead to another idea.

Example: you want to build a mall. Go to the angel, he gives you $ 100k and says: open the store and gradually grow. He also negotiates a lease and finds you a supplier.

What are venture funds doing?

These are large companies that are willing to invest their money if they understand that the project will bring profit. To assess this, they have a proven project evaluation mechanism, which involves a detailed calculation of the business plan, collection of various external data, and so on. Usually there is a very specific plan: for example, the project will be supported only if it can increase the capitalization of the company 10 times in 5 years.

It is difficult to turn to a venture fund at the zero stage, but having worked through a bunch of documents like a business plan, a marketing plan and collecting as much practical data as possible is quite real. This is an output of about a million dollars. True, to get them instantly will not work - the assessment may take several months.

Example: you will find out where and when a new district will be built, buy demographic statistics, order an architectural plan for a shopping center, roughly estimate the list of tenants, and go with all this to the fund. After some time, construction begins.

Next level

When you have a Skype, Instagram or YouTube startup, you can get a company that really wants to get your controlling stake. For example, it could be Microsoft, Facebook or Google, respectively. It is clear that the assessment is no longer needed (and everything works for you), investments can be almost any - the only question is what the investor will do next with your project. Most likely - or integrates into its ecosystem, or kill, to suppress a possible competitor.

Selection errors:

• Not the type of investor : it is foolish to come up with a long project to an investor working for a “short” profit, that is, with a task, for example, returning investments in 1-2 years.
• Not the investor profile : most often funds specialize in their fields. For example, only mobile applications or only banking. It is worth looking at the investor’s portfolio and redoing the presentation with an emphasis on the most interesting aspects to it.
• Lack of practical data . It is imperative that an idea be tested by any available methods that give numerical results. Pay attention - not by surveys of friends, but by something that allows you to get numbers. For example - the collection of email addresses on the site for pre-order. Or start collecting subscribers in social networks. You can also interview the experts, get data from the entrepreneurs of the sphere, and so on.
• No exact amount . You call the amount, not the investor - and any “about” or “approximately” will be an alarm signal that immediately reduces interest in your project. You have to know what your plan is for your dime. Naturally, anything can come up on the way, so a good fund has financiers who will check your plans.

The most important thing

Ask yourself what exactly the investor is waiting for you. If you think that it is just interesting for him to listen - better not go. Most likely, the investor has a specific problem (or problem) to which a solution is needed. This decision is you. At the stage of choosing an investor, you find someone who has a need. Now you need to show that you can close this need.

If you understand why you are an investor, then you should go to a meeting with the knowledge that the investor has actually been looking for you for a long time. Oh, he needs both your people and your ideas, and in general everything you offer. The main thing is if you did everything right before that - don't screw it up.

Two steps presentation

When you choose an investor, it is important to properly convey information.

• The first step is a beautiful promo. You need to quickly talk about the project and a little about the team.
• The second step will happen if the investor understands that everything is ok. This will be a detailed review of the project and the evaluation team.

The optimal composition of the presentation

1. The problem
An asteroid flies to Earth! It seems everyone will die!

2. Decision
Let's fly to Mars.

3. Business model
We will build a colony and we will develop it as we transport new people.

4. How it works
We will need three things: ships for delivery to Mars, shelters for saving people on the planet after the cataclysm, and the project of the colony itself. Before the catastrophe, we will go down to the shelters and launch the first ships, and then we will develop the colony and slowly transport the remaining people.

5. Marketing and sales
From a sample of 10,000 people:

• 20% understand that this is the end, and you need to be saved
• 15% would fly to Mars just like that.

We have already received 4815 applications for the month and scored about 100 thousand followers in various social networks.

6. Competition

1. The Chinese are building a gun on the moon, capable of shooting down an asteroid.
2. The Elder Scrolls VII is expected to be released, and the audience will not care about the asteroid.

7. Team

• Professor Einstein will be developing missiles.
• Dr. Strangelove has already prepared a draft asylum.
• Renata Richter has prepared a political program and has engineering experience in a planet without atmosphere.
• You look after these intellectuals.

8. Results and milestones

• Already constructed the first ship.
• After 40 days, the launch of the first shelter. Tickets to it allow you to build 2 more shelters.
• 45th day - filling the first asylum.
• 90th day - 5 shelters and plans of the colony are ready.
• 120th day - launch of the first ship.
• 182nd day - the foundation of the Martian colony.
• After 10 years, Mars will be green.

9. Status and plan

• Team assembled.
• The project was completed by 12%.
• We need another 20 million dollars.

10. Results and what to do

• Need money.
• Need any help on engineering.

Here is the contact information.

Errors:

• There is no good clear presentation. It is better to do it - it is very important.
• You are not very sure . Not all are masters of speeches, but if you cannot clearly and confidently answer the question because of the excitement, this is almost certainly a failure. Rehearse in advance.
• A trivial disrespect for an investor : if you kill someone without hearing a comment (rushing to argue, for example) - and you immediately get a huge minus, because a person could have something else in mind. This is trivial, but I have seen at least two projects whose presentations have collapsed because of such trifles.
• Attempt to give more data than you need . For the first stage, a general concept is enough. Many details - a sin. 20 words on one slide - already a lot.
• You need to look good , do not forget about it.
• If there is a prototype, take it with you . If there is a video, how it works - also take it.
• After a presentation to a large audience (for example, at a profile conference), be sure to stop in a free space in the hall or near the exit outside: interested people and journalists will approach you.
• Do not forget business cards . At the speeches, the biggest sin is not to allow those who wish to photograph the last frame with contacts (do you have it?) Or not to distribute business cards.
• Answer after the meeting on time . Most likely, you promise someone to send something by evening. So, take and send, even if for the sake of this you have to postpone something. Promised - do it.
• Do not forget to process the received contacts , for example, a couple of times a month to gently remind the development of your project to journalists and investors. It is possible they will ripen.

Here is a link to the first post , where there is a checklist of what needs to be prepared for the project.