It takes more than a cool and promising product/service to charm investors over. Yes, the dedication and chemistry between team members also plays a big role, but it takes more than that as well. Can you guess what the cherry on top is, that can make or break the deal?
Tact, and interpersonal capabilities on the part of the CEO.
Investors totally get the fact that meetings are a little intimidating for CEOs, which is okay. However, sometimes CEOs try a little too hard while trying to convince investors, or just don’t handle things properly, which ultimately ends up derailing interest. The investors end up nixing deals despite the quality of the product/service, simply because they were weirded out.
So we decided to write out some of the most common “worst practices” of CEOs during investor meetings, so you can get an idea of what to avoid, and why.
Too Much Pay? No Way!
Investors get turned off by CEOs that give themselves large salaries, especially in the world of startups. They expect most of their funds to go towards things like product development, advertising, and software subscriptions- not fat paychecks for the CEO. When investors spot CEOs that are taking too big a piece of the pie, they figure the CEO is simply impractical.
All For One. One For All.
This expands on the previous point. Investors find it favorable when CEOs own significant shares of their own company. It’s a matter of aligning interests, and commitment. If the company *wins* the CEO and investors will also win. If the company *loses* the CEO also loses.
Blah Blah Blah Blah Blah
Some CEOs spend most of their time meeting up with potential investors, and talking up a storm. Sure, the hustle is definitely needed sometimes, but not all the time. Investors see this as a red flag, and figure since the CEO is always out on these meetings, they are not managing the team/product development.
Three Is A Crowd
It’s usually a little awkward for investors, when CEOs bring multiple team members with them to meetings. We understand that it’s supposed to be harmless. But from the investors viewpoint, it raises a lot of questions. Is the CEO unable to speak alone? Is the CEO insecure? Is the CEO even involved? Does the CEO have an ego?
The (Subtle) Art Of The Deal
Investors get weirded out by CEOs that are quick to talk about making transactions happen. Come on- some tact please! Yes, investors do want to see that hunger and enthusiasm, but the conversation has to naturally lead to the transaction part- IF all goes well.