1) Prepare an intuitive narrative. While investors can and often will identify for themselves why your strategy may actually work, a narrative goes a long way to help them get there quickly. Telling a story looks like using analogy deliberately when helpful but not more than necessary. Helping an investor understand the intuitive narrative demands a clear integration of your personal history, the firm’s story and the comprehensive build-out of your program. Finally, allowing investors to tangibly connect with your logic should include a representation of what it is about the market and the world/human nature in general that means your approach can capture inefficiencies where other traders cannot.
2) Do not let “eyes glaze over”. It is very easy to allow yourself to get sidetracked and have a meeting fly by without hitting upon the most salient attributes of your approach. This is akin to telling a story that never gets to a climax because the main character gets too distracted describing the evenings esoteric attributes. Keep your story moving and when questions derail your main message(s) answer queries clearly and bring it back to your story’s key points. On the opposing extreme, be sure to pause and allow time for investor questions. The balance between highlighting your story and soliciting investor interaction is paramount though delicate.
3) Understand where an investor is coming from. Your edge is what it is, in a sense. But every investor will come from a unique vantage point. Take the time to understand who the investor is and what is important to them. You should never change the key points of your value proposition but you should be willing to understand how to explain it in a way that connects with investors. If you truly have an edge, the investor’s perspective will not change the reality that you will make money, but you can help yourself connect with investors by participating in the investor’s own paradigm.
Ask investors at the beginning of a meeting or when first introduced to state their priorities and objectives. As you get to know an investor, be sure to confirm that what you are saying makes sense. If you approach an investor with humility and an honest representation of where you believe you add value, you have positioned yourself optimally and left it to the allocator to decide whether they are interested. That’s all you can do.