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 The Deal Presentation

We are sure that you know how to present your business idea in front of investors. Here are the most common presentation gaffes that stand between entrepreneurs and the capital they need to grow their businesses. Avoid them and you'll be a star presenter.

Poor timing. If you bore your investors to tears, your presentation is too long and indicates to the investor that you are unsophisticated when it comes to the rules of engagement. It also tells your audience you have doubts as to what information is critical and what is simply fluff. On the other hand, you'll give investors the impression that you're unwilling to share important information if your presentation doesn't go on long enough. You want your presentation to last about 20 minutes.

Live demonstrations. These are almost always failures, particularly for technology-based products that rely on a PC, a laptop or a network. And if your demonstration does go wrong when you're pitching your deal, it may kill your prospects for raising capital. You should save live demonstrations for a later date when an investor already has put something into your business. Your best bet is to use videotape for perfect demonstrations every time.

Suspect numbers. Aggressive revenue-recognition policies, unrealistic reserves for returns or bad debts, the presence of deferred expenses or overzealous capitalization of expenditures can turn apparent profits into losses. Don't think you can slip these numbers by investors.

Technology overexplanation. What many entrepreneurs forget, especially those who are also scientists or engineers, is that technical details of companies' products or services are important only inasmuch as they deliver competitive advantages, open new markets or change the balance of power in an existing market. To the average investor, technology in and of itself isn't that important. Spend no more than three to five minutes discussing technology.

Poor attitude. Never treat equity investors like bankers. Equity investors are more akin to partners. And partners want to have their say, not be ignored. An engaging, congenial entrepreneur will be far more successful than one who is perceived to be rude, condescending or unhelpful.

Poor response to questions. The question-and-answer session is generally the most important part of the presentation. Investors rely on it to take full measure of entrepreneurs and test their sales skills. A common mistake during the Q&A period is to act like questions are stupid. Respond to every question as if it's reasonable and do not alienate anyone in the room. Also, avoid too much technical terminology. It can make you look like you're trying to hide something.

Inappropriate audiovisual support. With so much information in such a small time slot, investors who get distracted can lose the context of the speaker's remarks; therefore, it's important to have a visual outline. A presentation, accompanied by about 10 to 15 slides, overheads or handouts that emphasize the speaker's key points and give listeners a constant frame of reference, tends to be the most effective. Think of the slides as billboards that carry just the key messages.

Inappropriate follow-up. If there is no attempt to make contact after the presentation, even out of courtesy, many investors get turned off. A common rule of thumb is to follow up three times, and if there's no response, mentally write the investor off.

Author: David R. Evanson & Art Beroff

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