Avoiding the tech innovation brick wall: 5 tips to get buy In from investors and managers

Picture this

You’re a laser physicist with a great idea. You form a company to develop the idea, bootstrapping all along the way. You eventually get to a point where you need more capital (building a company isn’t cheap), so you seek outside investment. After many attempts, you finally get a meeting with an investment group that can potentially change the trajectory of the company. How do you convince them to invest?

Consider another scenario

You’re an enterprising laser physicist working at a company. You have an idea for a new product line that you think is sure to make the company money. With some work, you’re able to arrange a meeting with management to pitch your idea. How do you convince them to give your idea a green light?

Innovation does not happen in a vacuum. While bootstrapping a company is possible, startups often need outside investment to bring innovations to scale. Founders, then, need to convince investors to invest. Likewise, employees can’t just start innovating and releasing products to the market. Management must give its approval.

In short, innovation requires buy-in. These five steps may help you get it.

1. Sell the larger vision

Focusing solely on the product may not be the best way to go, according to Alex Waters, director of economic development and innovation at San Diego’s Jacobs Center for Neighborhood Innovation. “Technical founders focus on the tech, which they should, but they don’t always show how the tech fits into a larger vision. Investors want to make a profit, so if you can’t answer how this tech gets them to that long-term goal, you are at a disadvantage.”

Typically, investors put their money into certain preferred industries. The presenter needs to find out how the product fits into the investor’s portfolio. Have an optics product but you are pitching to investors who typically fund pharmaceuticals? Probably not the best fit.

Waters surmises that “the best tech doesn’t always win. What is your story on how you are going to build this business, make [the investors] money, and why are you the person to do it?”

2. Address the Why, What, and When

Claude Jones, vice president of engineering at Strava and former senior director of engineering at Walmart Global Tech, recalls a presentation he made to get management buy-in for Walmart Labs to invest in hiring 180 people in San Diego and move them into a 30,000-square-foot building.

“Not a tiny feat,” says Jones. He included several elements in his presentation to executives that helped gain traction for the proposal. He addressed why the investment was important, what problems the project would solve for Walmart, and a timetable for return on the investment.

Presentations to investors must also include a clear call to action. If the call to action is clearly and succinctly stated near the end of the presentation, it’s on the audience’s mind and is memorable.

3. Do your homework

Waters is a big believer in doing homework. “You should do your research on what potential investors are focused on, their investment thesis, and what they mention as reasons they were excited about earlier investments, as that will give you clues on what they value so you can ensure that you are aligned with their expectations.”

Research includes studying an investor group’s website to determine the industries in which it typically invests, having informal conversations with executives and founders who have received funding from a particular investor group, and attending pitch presentations by other startups to hear the types of questions a particular investor group might ask.

4. Avoid jargon and technical detail

It’s not uncommon for founders and tech professionals within companies to dive into numbers and data and use a lot of jargon in their presentations. Big mistake, says Waters. Replacing jargon with more commonly used words will increase engagement, and he recommends using analogies that can help explain technical concepts.

5. Make it personal

“Sometimes we forget that investors are people, too,” Waters says. They have a job to do. They have bosses that they have to explain decisions to. “They want to be excited and inspired about their decisions. So, your job is to include the things that they care about.”

Making a presentation personal is a great way to engage an investor group. How will your product address causes, or issues they care about? 

You can research management and/or investor group interests in a variety of ways. Technical professionals at a company should consider going to the management team’s administrative assistants and asking them what their bosses want to see in a presentation to get buy-in. A CEO may want to see overall strategy. A CFO may want to see financial projections. A CTO may want to see timelines for product development.

For founders looking for capital, Waters recommends doing “some customer discovery with other investors, analysts, accelerators, and whoever else is in the ecosystem to find out what the investors you are speaking to value above everything else.”

Jones advocates acquiring champions for an innovation early on. “Upfront support and alignment by influencers [or] key stakeholders [are important]. I was able to circulate my idea to the right people to get buy-in up front. The more the idea was shared, the more it became a reality. By the time the presentation was shared, there was already buy-in.”

The future of technology and innovation depends on buy-in from investors, upper management, and other decision-makers. Failure to communicate the value of technical innovation will lead to a brick wall. Following these steps could help you avoid the collision.

Neil Thompson is the Founder of Teach the Geek and an engineer who works with other technical professionals to present their work more effectively, especially for nontechnical audiences.
www.teachthegeek.com.