By Khalid Aziz,
“If it was my money, what would I be looking for.”
This is the single most important question that needs to be answered in an investor presentation and the mindset that PRs advising clients or C-suite teams about investor communications need to keep front of mind.
It sounds so simple, yet so many CEOs need clear guidance. Ask any C-level executive what aspects of their role they find challenging and many will admit that pitching to investors is one of them. For lots of reasons.
When presenting to investors, the future security of the company literally depends on their ability to win over and influence the financial community. It is through succeeding here that the company’s strategic vision will become reality. While many senior teams will have been through leadership development and technical training, investor presenting and communication skills coaching can often be overlooked.
There’s an assumption that these skills have been honed perfectly well already, that media training will be adequate, but it’s often not the case.
So, what could you learn from the experts, to help when preparing your C-team for their next big pitch?
1: Grab the audience’s attention quickly
Senior teams often think that because they have 60 mins to deliver an investor presentation, they’ll have their attention for that time. They go into too much detail about the underlying technology, service or product design and fail to make the right impact.
The reality is very different. Most people get a maximum of five minutes when the audience is really attentive and for the rest of the time, engagement dwindles. It might rise and fall slightly, but will generally be staying well short of where they started off.
In contrast, a successful investor presentation is designed to reverse this pattern. It uses the first 5 minutes to earn the audience’s attention for the next 15 minutes, which in turn will interest the investor enough to listen on, finally concluding with the Q&A. The key is to anticipate what the investor community is expecting to hear. Investor presentations need to play out like a crime drama, where the essence of the story – your ‘why’ – is shared at the outset, to grab the listener and the narrative can slowly unravel.
Start with the punch-line and then work backwards, so the audience can piece the threads together.
2: Understand the power of ‘storytelling’
Staying with the parallels of drama, a good investor presentation should be developed around the concept of sharing a story rather than presenting financial results or a company update. For starters that’s boring, plus we can process stories more readily and with greater ease than we do facts and figures. That’s not to say facts and figures are unimportant, but without the narrative framework and context of a story, it becomes less meaningful.
For start-ups seeking seed investment, that story needs to be related to how the company came about. What was it that inspired the founders? Were they working around the clock for social good? What’s the need they are satisfying and why is the proposition credible?
For larger companies who are either already publicly listed or seeking scale-up funding, an investor presentation needs to be treated like the latest episode in an existing drama series.
How is that initial ‘event’ unfolding? Think of an appropriate title-theme for the episode and frame the presentation accordingly. It’s less about “ABC Plc’s 2018-2019 financial performance” update and more “ABC Plc’s exporting adventures in Asia”, for example.
3: Is PowerPoint a good idea?
In general people use too much PowerPoint in business and they also confuse the written material with a spoken presentation. While the PowerPoint slides in the advance or leave behind pack can be very detailed – because individual readers can analyse it at their leisure – any slides supporting a presentation should be much simpler and far fewer in number.
In essence, an investor presentation is a political exercise. Do you ever see a politician using PowerPoint? Exactly. The investors are there to assess the speaker. They want to see whether their credibility matches the figures and detail – which they can read in the supporting documentation anyway. So, don’t hide behind or distract an audience with PowerPoint.
4: Go for engagement – messages delivered are not always received
Traditionally, business communication theories focused on how ‘messages’ were delivered. The implication was that when information was carefully crafted into messages and disseminated to a target audience, it was job done.
Although the message might have been delivered in a mechanical sense, how well it’s being received by the audience is another matter.
By telling a story to investors rather than just thinking in terms of delivering a set of messages, you have the opportunity to engage and draw them in, building what communication theorists describe as ‘mutual understanding’. This is the essence of good professional communication and a foundation upon which a trusting, long term relationship can be built with the investor community.
5: The 5 C’s of corporate storytelling
All good stories are based on a set, 5-point structure: Circumstances (setting the scene with macro-economic conditions, company developments), Curiosity (this is the cliff-hanger opener to pique their attention and involvement), Characters (interesting personalities in the C-suite), Conversations (market insights) and Conflict (how you overcame hardships to succeed or be on the road to success).
It’s likely your story won’t feature solely good news and it’s important to be honest and transparent with investors. They will be doing their own due diligence and quick to spot any contradictions in your presentation.
6: Balance optimism and transparency
It is very difficult to strike the right balance between being optimistic and positive, while at the same time, demonstrating transparency about obstacles and issues that investors will no doubt have become aware of. Especially in situations where news is less positive than expected, you need to be in control of the message.
Being forthcoming with information – positive or negative – means you get to tell the story before someone else tries to do it for you. The art of being a successful communicator lies in being able to balance the two, being authentic and transparent, accepting criticism when things aren’t as good as expected and not trying to hide behind a smokescreen.
7: Always expect the unexpected – how to prep for the Q&A
Imagine the scenario. Your C-team have delivered an outstanding presentation, there’s a positive atmosphere in the room and now it’s time for the Q&A. The opening question stumps your CEO and quickly turns an otherwise flawless performance into an awkward moment.
Poor planning for the Q&A section is one of the most common reasons why a presentation fails to impress investors.
The key point is to start early. We recently worked with a large multinational on a pre-listing presentation which was to be held in January. We started the process in September, with a timetable that aimed to give every participant the support they needed depending on their presenting experience. Eventually the group came together for at least two rehearsals, so they were comfortable working together and could demonstrate being well integrated as a team to investors.
Ultimately, effective investor communication comes down to one rule. Just like every aspect of communication, think about your audience and their needs. Put yourself in their shoes and once you’ve done this, you can start to influence them.
Khalid Aziz is an executive coach and specialises in communications coaching, he is the CEO of Aziz Corporate