Q&A: The Neglected Stepchild of Financial Presentations
By Brenda Besdansky
Looking for money on the private or public market today is much more difficult than it was a year ago. To make the most of your precious time in front of a potential investor, you need not only have an excellent, compelling presentation, but you must prove that you can also think on your feet.
The Q&A session is that point in a live presentation, whether a formal presentation or an informal pitch, where you can be in the spotlight. You can demonstrate your original ideas, credibility, expertise and authority. The successful entrepreneur must be able to plan for inevitable questions, and must learn to think on his or her feet in order to provide answers.
According to Doug Hamilton, Managing Director of Silicon Valley Bank’s Venture Capital Group, “The Q&A is an entrepreneur is rarely prepared for. He or she is generally prepared for the presentation. But how this person can act on his feet and give a good response to a question or comment that he or she may not be thinking about is something else.”
It takes preparation to come off looking like a star when answering questions. Here is a practical guide for anyone who wants to be a successful presenter.
Why prepare for a Q&A session
Being able to handle questions is one of the earmarks of someone who is investment-worthy. Yet, as Doug Hamilton points out above, it’s an area that most entrepreneurs may have overlooked.
Knowledge, spontaneity, flexibility and delivery are some of the key qualities upon which your answers will be judged. Each quality supports the others. It is hard to appear confident and self-assured if you haven’t done the preparation that enables you to be confident and self-assured.
When a VC asks questions, it is an indication of interest in what is being presented. Being prepared to handle questions means being prepared to prolong and develop that interest. Questions will come from what is presented, and may simply be inquiries about details. You should be prepared with those details.
If you have done your job, VCs will also ask questions related to other information — ideas and thoughts based on his or her own knowledge and prior experience. You can’t know all the questions a VC might ask, unless of course you’ve developed a way to read minds (and what an investment-worthy invention that would be). However, you can anticipate the kinds of questions he or she might ask and prepare the kinds of responses you might want to give.
The key is to keep answers short, at least at first. This encourages more questions, and more interest. Unless the time you’ve been allotted happens to allow for detailed description, if you spend too much time answering one question, you may undermine the VC’s time to ask other, important questions. You probably know from experience that keeping answers short requires practice and preparation.
The knowledge of which details to present and which to hold back is as important as the knowledge of the details. Don’t throw up all the information on your business plan in a presentation. Don’t bury the VC with details. Your objective is to create interest and let questions build naturally about the business plan.
Anticipate questions. Write down the 20 questions that a VC or other interested party might ask about your business plan. Then compare them against the level of detail in your presentation. If any of them are answered outright by the presentation content, eliminate them and think of other questions to replace them. Be prepared to answer these 20 questions clearly and succinctly.
Part of your preparation for presenting might be to practice on colleagues, or even potential investors that are lower down on your list. Encourage them to ask questions, and draw from that experience.
One way to continuously keep yourself Q&A-ready is to keep a presentation journal. Jot down your own impressions of how the session went. Include questions and comments from your audience and how you think you handled them. In other words, debrief yourself about your presentation. For more objectivity, you might ask a colleague to make notes regarding your performance, and to also keep track of the audience questions and your responses — and how the questioners responded to your answers.
If, despite your preparation, you can’t answer a question during a Q&A session, be prepared to say “I don’t know” without apology. Volunteer to research the answer and get back to the questioner. Make sure that you do get back with the answer — and that it winds up in your presentation journal so you are prepared the next time!
VCs respect people who can think on their feet. Don’t memorize your answers; familiarize yourself with answering the questions. As long as you have some idea of a response to the question, you can be quite spontaneous. Remember, it is likely that someone will ask you a question not on your top-20 list. You will be better prepared for such questions simply because you’ve prepared for the Q&A in general.
The Q&A is interactive that your formal presentation. When asked a question, it is important to develop the sensitivities and habits that ensure that you understand what is being asked. Listen for the subtext of the question. Don’t plan your answers before the question is completed. Aside from being disrespectful to the questioner, you may not answer the real question — and you will miss the subtleties.
Of course, with appropriate preparation and practice, you might have the answer on the tip of your tongue, but wait until the question is finished before answering, no matter how eager you are.
Repeat the question and/or confirm that you heard the subtext, with lead-ins such as “I get the sense that . . .” or “It appears that . . .”. If you have listened carefully, you will be able to rephrase the question correctly. Simply ask the questioner if you have answered their question, if you’re not sure you have.
Think about the questions in the context of your presentation, and previous questions. Questions are often asked in a variety of ways about something you think you have already answered. This can be a test to see if you are consistent, or it may be that you have not provided all the information the listener is waiting to hear. You need to be flexible with your answers, adapting them to variations of the questions.
Also, stay flexible enough to make leaps in logic and intuition if a question puts your thoughts into a new path. Be able to change and adapt your thinking about your business plan based on questions and comments from your audience.
Delivery style is important when answering questions. You want to continue presenting an even front to your audience — in other words, you want to stay in character from the more formal presentation through any Q&A. You ought to be even more confident, though perhaps more thoughtful, through this part of the session.
All the stylistic factors that come into play for the planned part of the session also come into play here. You want to remain cool and confident when responding, even if some questions provoke an emotional response in you.
What if I don’t understand the question?
There are a couple of ways to handle this. Repeat the question back to the inquirer as you think you understand it. “If I understand you correctly, you want to know … ” If that’s not what the questioner has actually asked, he or she should correct you. The alternative is to ask a question back to help clarify the question.
What about skeptical or hostile questions?
Preparation and practice are key. Try to come up with negative questions that could be asked, even though they might be ones you’d rather not deal with. Consider ways of answering such questions that might defuse any emotion being projected by the questioner.
Repeat the question back. This allows you a further chance to organize your thoughts and make sure you clearly understand the question. Listen not only to the words being used but the manner in which the question is being asked. Look past the question for possible underlying emotional or logical unspoken issues. Consider those when constructing your answer. Maintain your solid delivery style and answer the questions clearly, keeping your answers short. Confirm that the question has been answered.
How do you handle a heckler?
A heckler is special type of hostile questioner. Hecklers don’t stop with a single question; they want to take over the floor by monopolizing the Q&A period. Fortunately, you’re less likely to be heckled during a financial presentation than a performer would by his or her audience. However, when presenting to a group of potential investors, it may be that one of the audience may be motivated to heckle if he or she favors a competing company.
Unlike a performer, if you are presenting a business plan to potential investors, you are in no position to respond in kind — or ask that the heckler be removed. One possible remedy is to politely offer to spend some time addressing his concerns by meeting individually with him after the session so that others can get their questions answered as well.
Here is some advice from news media interviewers and coaches: You must be prepared to stay cool and not react emotionally to the heckler’s comments. Be polite, cool and confident. If you remain calm, you might see the heckler getting more and more emotional, with some getting so steamed as to appear irrational. This is usually the point at which the audience turns on the heckler and is even more attentive to what you have to say.
The heckler is often simply trying to make you react emotionally to the situation, to lose you cool. In some twisted way, the heckler might then feel he has “won” something. If you bite on the heckler’s bait it’s a good bet you’ve lost — control of the situation and possibly your opportunity for funding.
What if the audience asks no questions?
It is possible that you have covered everything in the moment, and any potential questions have already been answered, but in a short pitch situation, to say that all possible questions have been answered is unlikely.
It is also possible that your audience feels too overwhelmed or too bored to ask questions. Don’t panic. Take a moment, breathe, and adopt a open and neutral body position.
You can prime the pump by coming up with your own questions, using language that introduces questions that are frequently asked. For example: “I have been asked about . . .,” or “It comes up frequently . . .,” or “Many people have wondered . . ..” Have answers ready for those self-generated questions. Above all, know your audience well enough to know what questions they are most likely to ask.
Some final advice
Prepare for the possible questions you might be asked, the various ways they might be asked, and how you’d answer them. Practice, practice, practice.
If you feel uncomfortable with this part of the process, or if you feel the need to be the best you can be at Q&A, find a suitable coach, one that already is immersed in the VC/Entrepreneur process.
A good coach can be the difference between success and failure. Get a coach who knows the value of a VC connection. For example, Speakers World offers coaching based on questions gathered from various VCs.
Here is an example of the value of good coaching. I coached a CEO who was going out on a tough IPO roadshow. He was open and willing enough to allow his team to act as a mock audience, and to ask him the questions that he wanted to be asked or thought an audience would ask and even the questions he was hoping he would not be asked.
In my role as a coach, I directed the audience to ask the questions in a variety of ways: looking bored, interrupting, asking inappropriate questions, showing hostility. I wanted them to disrupt and distract. As a result, he was coached not only on how to answer the question and how to deal with the manner in which the question was asked. That manner can often display underlying issues and concerns — the questions behind the questions.
You have invested a considerable amount of time in preparing and practicing your presentation. Don’t fall into the complacency of assuming that you can handle the questions that result from it without the same amount of preparation and practice. In fairy tales, the ugly stepchild often turns out to be the glamorous hero of the story. Q&A, done well, can often be the part of the session where the protagonist gets the prince/princess — or the pot of gold.
“The Q&A is one thing that an entrepreneur is rarely prepared for. He or she is generally prepared for the presentation. But how this person can act on his feet and give a good response to a question or comment that he or she may not be thinking about is something else.”
Silicon Valley Bank’s
Venture Capital Group