Style, 1. Substance, 0

Every outside investor who invests in a company knows their payday rests with it being successfully sold to a larger entity to the public. Thus there’s a real premium placed on presentation and selling skills. And that’s why you hear things like:

“I’d rather invest in a really good company where the founder/CEO ‘gets it’ than the perfect company run by a rocket scientist.”

And so, it this one regard, style actually does finally win one over substance. With this in mind, here’s a list of common mistakes business owners make when trying to pitch their business to people like me.

Bad Timing. Frequently, business owners say too much or too little. On balance I’d suggest that saying too little is worse than saying too much. My experience has been that many entrepreneurs are tight-lipped because they are afraid of giving away the secret sauce. This is silly and makes them appear naïve as well as untrustworthy. Naïve if they really think I’m going to drop everything I’m doing to and replicate their business, and untrustworthy to believe there is some other agenda to the meeting other than trying to figure out how to make money together. While a little naïveté is charming when it’s not tiring, the lack of trust is no basis upon which to build a partnership and usually stops progress in its tracks.

Of course the other extreme is presenting too much information. This suggests a lack of appreciation for what’s important to investors, and thus in it’s own way shows a little naïveté as well.

The right length is 20 minutes. Enough time to sell the sizzle and the steak.

Live demonstrations. These have a knack for failing at just the wrong moment. Much better to save these for the point in time when the investor is emotionally invested and more willing to overcome an ill-timed gaffe.

Droning on About Technology. Granted the technical aspects of company's product or service are important -- inasmuch as they deliver competitive advantages, open new markets, or change the balance of power in an existing one -- but to investors technology is not important in and of itself in the initial meeting. Spend no more than three to five minutes discussing technology. Any more time spent on science is less time devoted to selling the deal.

Poor visual support. The complexity of what’s being conveyed almost always requires some sort of visual support to ensure adequate comprehension. The most effective presentations are accompanied by 10 to 15 slides, overheads or handouts that punctuate the speaker’s remarks, and give the listener a constant source of context. Corporate videos, slides of Byzantine complexity or no visual support whatsoever reduce comprehension and enthusiasm.

Arrogance. A lender will tolerate arrogance. After all, if a company can repay a loan, it can repay a loan and who cares who how its founder acts? An equity investor on the other hand will not tolerate arrogance. The thinking goes, “If my money’s in the company, the founder’s got to be ready, willing and able to take my input, period.”

Poor Response to Questions. The most important part of the presentation comes at the end, when the entrepreneur faces questions from the investor. This gives the investor a real feel for the entrepreneur and the opportunity to drill down to see just how carefully he or she has thought through the business. Sometimes presenters shoot themselves in the foot here by giving the impression that the questions are, well, not very intelligent, and that he or she is smarter than everyone else in the room (see Arrogance above).

But perhaps most importantly, it enables the investor to see if indeed there is any substance or whether indeed they’ve just been treated to a very slick presentation. So in the end, substance does win, but getting to the place where it matters most requires some real style.