The quality of your offer video can make or break an investor’s perception of your capital raising offer. It will often be the first impression you get to make on an investor who visits your offer page. Even large investors who are doing thorough due diligence can be partially influenced by the quality of your offer video. I've helped companies raise capital in London, New York and New Zealand and I've seen some truly terrible capital raising videos from companies that should have known better, so I wanted to share with you the toughest lessons that companies often don't want to hear.
1. You are the star of the show
The video must contain at least some footage of the management team talking directly to the camera. This might be uncomfortable to film, but investors need to see the whites of your eyes to trust you. Human beings are deeply wired to make snap judgements about other humans based cues such as tone of voice, facial expression and body language. It's not easy, but you need to relax in front of the camera and deliver an open and honest explanation of why you are excited about the growth of your company. One technique that I often use with CEOs is to get them to do more “takes” during the video shoot than you would think that they need. After enough tries in front of the camera most people eventually start to relax. Doing more takes also means that there is more chance of capturing a perfect delivery.
- The Zeffer management team took the time to script, rehearse, shoot (and reshoot) their segments direct to camera so that they were clear, confident and compelling.
2. Don't hide behind the music
Almost every draft version of a capital raising video that I review has the background music set way too loud and the speaking track volume way too quiet. This hurts the effectiveness of the video because the audience needs to hear the substantive content clearly to be persuaded by it. It’s tempting to want the music to “set an upbeat tone”, but loud music is just distracting from the core content. The music in a capital raising video is not there to add emotion (like in a movie trailer), instead it's there to quietly fill in the silences and editing gaps in the main audio track. If you're using a professional video editor, you could tell them to use "push down" audio mixing (where the voice track pushes down over the top of the background music), but honestly, the best technique is to just set the background music at a really low volume and keep it there. Never let the music compete with the voice track.
- The ableX team used quiet background music to smooth the silences between multiple edits.
3. Don't be cutesy
It's tempting to add animations, graphics and flying logos to your video. These are acceptable if they serve a purpose and communicate a visual piece of information that could not have been communicated verbally. Good examples include a process flow diagram or a chart of business performance, but don't add animations just to "mix things up", it suggests that your core content isn't interesting enough. Even if your normal brand videos contain a lot of animations, for a capital raising video it’s best to keep things simple.
- The Punakaiki offer video uses animation only to introduce their portfolio companies and convey information that couldn't have been delivered in another way.
4. Keep it legal
The written part of your offer will contain a lot of legal details like historical financial information, forecasts and a discussion on exit strategies and key offer terms. Don't put these into the video because if the legal material changes at some point in the process, then the video may need to be re-shot or re-edited. Even worse, the disclaimers necessary for financial terms don't fit easily into a video format and it's risky to have the terms in the video because it could be shared without context. The video is the big picture. It exists to act as a teaser and a summary of the offer, so you can leave the detail of the offer terms for the written offer page.
- The Designer Wardrobe offer video focuses on the product, users and company without getting into the legal details of the offer.
5. Cover all the bases
In terms of things that you need to cover in a good offer video, you need to take the viewer on a whistle-stop tour of:
You also need to cover the key elements of your company's story including:
- The Invivo offer video covers the past, present and future of the company.
Detail: The story elements of the video are there to give the viewer a "reason to believe" in the overall investment message. You don't need to go into too much detail in the video, but don't be afraid to add some specifics and examples because that makes what you're talking about seem more real. For example, don't just say "We want to expand globally", instead go ahead and state your general goal and then add a specific such as "We want to expand globally and the next three countries we want to expand into are x, y and z."
Length: The average offer video is 2 to 3 minutes long. Some companies fight hard to make the video as short as possible to try and keep it interesting. But an interesting video can actually be as long as it needs to be. And a boring video doesn’t get any less boring by being cut shorter. Instead, you need to do the work in advance to make the content interesting enough that someone wants to take the time to watch it. Keep things interesting by preparing well in advance, keeping the enthusiasm of the presenters up, making the material substantive and worth watching, and by being clear and direct.
Below is a link to the recent offer videos on Snowball Effect. You’ll see some common themes such as covering the history of the company and including quotes from customers. You can learn a lot from watching a few videos and then applying your own style to the format. Some of these videos are more compelling than others, but it’s worth seeing a variety of approaches so you find your own style and decide what works best for you.