The Art of Raising Capital by Darren Weeks

Author:Darren Weeks [Weeks, Darren]
Language: eng
Format: epub
ISBN: 9781937832674
Publisher: RDA Press, LLC

Chapter Review

•Your presentation is all about you and your story.

•The B-I Triangle offers an excellent framework for talking about your business.

•At the end of your presentation, you want to know whether the investor intends to invest or not, and when.

Chapter Six

Working with a Group

The most obvious way to leverage your time when raising capital is to present your story to a large group of people. Group presentations involve very different dynamics from meeting with investors face-to-face. The most obvious difference is that you will not have the same type of information on each person in the room as you do when you sit down and build a relationship with an investor. This means that you can’t tailor the presentation to speak directly to that investor and how he or she looks at investments. While this takes some of the power out of a great presentation, the scale that group presentations can allow you to achieve is well worth the tradeoff—if you do it right.

My first experience with group presentations was as a member of the audience. I was invited to an investor lunch-and-learn for a hedge fund in 1995. The presentation took place at a high-end restaurant in downtown Edmonton. I remember walking in and being impressed by the detail they had clearly put into setting up the event. They had a registration table and a short brochure as well as the card of the presenter. I entered the dining room and they served us a set menu before the presentation started. When it did, the manager of the hedge fund took the stage and, in what was a first time for me to see, owned it completely.

He started talking about his experience as a stockbroker, running orders by hand and moving up the ladder. Then he spoke about how the market had changed with large funds constantly in buy mode. He outlined the opportunity that this created on the opposite side. When I entered that room, I had an academic understanding of a hedge fund and how they made money. When I left, I left with an image of the hedge fund as an underdog that grabbed huge profits for independent investors while the clumsy giants of finance mechanically bought and sold. It was a powerful image that made everyone want to be a part of a hedge fund.

The interesting thing about that image is that it took serious liberties with the truth. In the 90s, hedge funds were already as massive as mutual funds. They shared the same structure with the primary differences being how much risk they took on and how much they charged investors in management fees. I am not going to get into the intricacies of hedge funds versus mutual funds, but I will say that I don’t consider them an ideal investment for independent investors. The important point is that the speaker made us all believe in that image through the power of his presentation.

Despite the quality of the presentation, I didn’t end up investing with the hedge fund.

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