If you know how what a deep dive meeting is and how to prepare for it, then it's likely you also know how to navigate your way through it so you can move forward with investors into and through due diligence. All that is left to know is how avoid undermining yourself during the deep dive meeting itself.
Traps for the Unwary
We've talked about the importance of building rapport as a key function of the deep dive meeting. If there are ways to build rapport, there are definitely ways to destroy it. These traps are distressingly easy to fall into for a stressed-out person under a lot of pressure. However, with a little preparation, some self-awareness, and some knowledge of the issues, it is possible to avoid them.
Be Strong, but Have Some Humility
Investors are searching for founders with spine and a clear vision, and the tenacity to be successful. But they also want someone with some self-awareness and humility. Investors prize what they call coachability. Trying to be a know-it-all will put a very deep chill on the mood in the room. Coachability is not about being a wet noodle, open to every suggestion - it is about being willing to listen to and engage different views, and even taking a bit of good advice here and there.
Don't Lose Your Cool
Another very negative dynamic can occur when investors feel that the entrepreneur is failing to listen to the question and answer directly. Similarly, becoming flustered and lacking poise and grace under pressure will worry investors. Conversely, dealing with your frustration or covering up your insecurities by being argumentative or combative is also a very bad idea. The investors have showed up because they are impressed with you and are interested in your company. Tough questions are a sign of curiosity and respect. They are not asking to trick or trap you, they are asking because they want to know the answer. And, if a question relates to something that is just unknowable at the present stage of the company's development, it's ok to just say so. There is no need to be defensive or hostile. No one expects you to be perfect or to know everything.
Watch Team Dynamics
There are also some team traps that are easy to fall into when you bring co-founders to the deep dive meeting. These traps generally fit under the heading of team "choreography" mistakes. Although many CEOs choose to just show up alone (which can work, provided you have a good team slide), there are some advantages to showing off your great team. To make it work to your advantage, you need a plan, and lots of prep to nail the execution. Here are some traps to avoid:
- Keep Team Members from Rambling
The first issue is co-founder verbosity. Be forewarned. Co-founders need to be very brief and stay on script. Even in the best case, brief interruptions and transitions are disruptive to the flow of a meeting. If they are long-winded, it can be a disaster. It can cause a loss of momentum you cannot easily get back. Do the prep necessary to keep co-founder answers short. Sometimes co-founders have been bottled up so long they start rambling and over-answer (this can be acute, for example with technical co-founders who preside over very complex subject matter).
- Know Who Is On Point
It is also important to prep your ownership of topics to avoid the pitfall of not knowing who should answer which questions. If multiple people jump in and talk over each other, investors will wonder who is in charge (and why you didn't prepare better). Generally, the best plan is to agree that the CEO will take all questions EXCEPT those on specific topics. Then agree exactly what the answers to those topics are going to be and practice them until they are fast, tight and on point.
- Beware the Contradictions
Similarly, contradicting each other makes people wonder if you are on the same page. Or, worse, they might think you are covering something up or not being totally forthright. The same is true with steamrollering over a co-founder trying to answer. Both make people wonder if you are a good manager or command the necessary respect if you have to be brusque or harsh in managing a cofounder.
Deep dive meetings are hard. The main reason is because there is nowhere to hide. The process is a long, unstructured, Q&A meeting with the outcome potentially having a major impact on your business. That is a high pressure situation. Being prepared is essential. Knowing ahead of time how to navigate the deep dive through the interactions will help get you ready. And finally, mastering the choreography and body language of the team during a deep dive is critical to a successful outing.