Why the CEO Should Conduct Investor Intro Meetings

This week's tip: why only the CEO should do your introductory meetings.

When I was a VC I met a seed-stage company that I was excited about. The founders had already created an app with over 1 million users, and were now pursuing a more ambitious goal of helping people with longevity/ageing.

I was hooked with the company's vision and believed that they had the potential to be truly game-changing. In fact, I still do.

On paper, everything looked great:

• They were experienced founders
• Building a great product
• With a track record of user growth
• Targeting a large market

However, despite all of this, we ultimately decided to pass on investing in the company.

Why? Because we had never actually met the CEO in our first two meetings!

It was difficult for us to get comfortable with a business without even meeting the CEO.

Now, you may think that your co-founder is better at pitching than you are. So of course they should be in the initial meetings, even if they aren't the CEO!

But this is where you go wrong. The first meeting is less about your company, and more about whether they trust the CEO - the main person who they will back.

Another example, is one of the most common reasons why I rejected companies after an introductory call. It was because there were too many people on the call.

I couldn’t get comfortable on either of them, so decided I probably wasn’t excited enough; an instant rejection.

That's why I always recommend that the CEO conduct the first two meetings with investors.

Here’s 5 reasons why it should always be the CEO first:

1.The CEO will always be the leader

The CEO bears the responsibility of leading the company to either success or failure. This applies to every aspect of the company, including revenue growth, hiring, and product development.

Investors will only be willing to invest in your company if they have confidence in your ability to execute your plans.

When multiple 'leaders' are present in a meeting, investors may find it difficult to identify the true leader, even if titles are stated.

This situation undermines the investor's trust and hinders their ability to determine who they need to establish a rapport with. As the CEO, this responsibility will always rest on your shoulders.

2. The CEO is who the investors will communicate with

The CEO's role is to lead and effectively communicate the value of the company. Remember, taking on investment is just the beginning of your connection to this investor, not the end.

You and the investors are essentially committing to spending the next 6-10 years together. You will be communicating through various channels and states through the years, whether its:

• Emails
• Face-to-Face
• Board meetings
• The good times
• The tough times

That’s why investors want to meet you and get to know you. They want to know if you are someone they like, would be happy to socialise with, and can trust will communicate your current company state in the right manner.

I rejected multiple companies purely because I didn’t get along with the CEO. Even if the company had potential, I didn’t trust they would be truthful, communicative or collaborative after we invested into them. It wasn’t worth my time, and 9 times out of 10 they failed purely because of this!

Those first few meetings are mainly to see if they’d like to spend more time with you, not only your company.

FYI: This is why investor updates are so powerful, and why I always talk about them. Having professional and robust investor updates, gives investors another example of what it would be like to work with you and how you communicate where your company is at.

3. It's hard to build rapport with multiple people

When multiple founders joined a introductory meeting with us, it was extremely hard to build rapport with everyone.

At the same time I was trying to understand whether their company was interesting enough, I was also trying to see if I liked spending time with all of them!

But the problem was that I was speaking to multiple people at a time.

Who was leading the business?

Who was the main point of contact?

Who will I be emailing after this with next steps?

When you bring multiple people into a meeting you dilute the opportunity to build a real connection of why they should be excited by you. All because the investors are constantly changing their attention from each co-founder.

The investor won't remember you, because they have multiple other people and things to think about within the same meeting.

This is a crucial area to focus on in order to effectively manage your introductory meetings and causes you to have a MUCH higher chance of not getting that second or third meeting.

From what I've seen, around a 2-3x reduced chance!

(I'd love to see if anyone has done any studies on this, although not sure how easy it is to do!).

4. It takes up all your time

When you "officially" launch your fundraise, it's important to consider the demands on your time.

Ideally, you should have between 50-100 meetings booked in the first two weeks, each taking at least 30 minutes. That's a total of ~50+ hours consumed by meetings alone in a two-week period. This doesn't include creating more content, replying to emails, setting up new meetings, or other important tasks.

It's easy to see how fundraising can take you away from building your own business. If you add your co-founder to every meeting, this only worsens the issue.

It’s just not worth it.

5. Your team can keep on building the business

One of the companies that we were considering investing in failed within 12 months.

We had actually got quite far into the investment process, before I asked,

“How is the company doing, right now?”

Unfortunately, the response was not good:

• Growth was stagnant
• User churn was increasing
• The wider team were losing faith

All of this was due to the founders' excessive focus on fundraising, leading them to neglect their own company.

Although the company eventually received investment from some angel investors, the damage had already been done.

The progress of your business during your fundraise is critical. By keeping these meetings solely with you as the CEO, the rest of your team can focus on the actual business as much as possible.

It allows you to provide updates on your performance, backchannel with investors, and generate more excitement. I’ve seen it time and time again that a company loses its momentum because all the founders are so focused on fundraising.

As the CEO, you should delegate tasks to your co-founders/colleagues and be specific about your priorities. Just before and when you launch your fundraise you should be telling your colleagues that for the next 3 months, fundraising will be your main focus, and building the business is theirs.

This allows you to be laser-focused on securing term sheets, while your team can remain focused on building the company.

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"So when do I bring in my co-founders, Gian? Should they never speak to investors?"

No, of course not. Investors will want and need to meet your co-founders.

In my experience, the best time to introduce your co-founders is when an investor wants to learn more about your company, which typically happens after the second meeting.

At this point, you can bring them in to show what areas they are leading on.

This gives your co-founders the opportunity to demonstrate their expertise and your ability to delegate as a CEO.