The Importance of a Discovery Meeting with a New Investor

Part 1 of 4 in Scale IR’s Discovery Series

You might think that your first meeting with an investor is about your pitch. It’s not. Your priority should be getting to know the prospective investors and uncovering alignment. That’s why we call the first investor meeting a Discovery Call.

Today, competition for retail investors is higher than ever.

In a market like this, the first conversation with an investor can matter more than anything you say in your deck. Not because the deck isn’t important, but because the deck can’t do the one thing the Discover Call must do: show you who this investor actually is and what will matter most in their decision.

That’s why you need real discovery.

This article explains what real discovery is and why IR teams should prioritize it during their first meeting to raise capital efficiently.

You’re Probably Approaching Discover Meetings Wrong

Most GPs and IR teams think they know what discovery is, but they don’t. They treat discovery as a quick conversational warm-up before the “real pitch,” which turns out to be the same script they use for every prospective investor. They move too fast, make assumptions, and skip the part that determines whether any of the information they’re sharing will land in a meaningful way. That’s not discovery.

An effective Discovery Call should allow an IR associate to tailor their pitch to the investor's needs.

Discovery Tells You What Matters Most

With the right questions, a potential investor will happily tell an IR associate what matters most to them in an investment offering.

It could be:

• Sponsor track record

• Market dynamics

• Industry

• Market sector

• Returns

• Risk drivers

• Capital structure

• Deal structure

Listening for cues about what the investor cares about helps IR associates quickly and directly address those points during their initial pitch. This strategy helps quickly establish alignment while providing a foundation for next steps.

Discovery Establishes the Tone of the Relationship

Capital raising is a relationship business. The more relationships a GP has, the easier it becomes to raise capital. Unlike later conversations, the first call begins at zero: investors have no context for how you operate besides what they may have read online.

Converting leads to capital depends on trust, clarity, and alignment, none of which exist at the start. Discover helps the IR Associate get to know the investor so that they can tailor the pitch and the rest of their future communications to address what matters most to that investor.

When discovery is done well, it shows the investor:

• You’re listening.

• You’re genuine.

• You’re not pushing a pitch.

• You’re not wasting their time.

Without discovery, GPs default to a “universal pitch” of the property. If you find yourself following the same script in every investor meeting, you’re falling into the universal pitch trap. While you may be getting out a lot of information, that doesn’t mean you’re getting out the right information. As a result, there may be misalignment.

Discovery Prevents Misalignment and Reduces Future Friction

Not every investor will be the right fit for your offering. In fact, the majority of them won’t be. It’s okay to let go of leads who aren't the right fit. One of the defining features of top-performing investor relations associates is that they know how to quickly identify misalignment and move on to the next lead.

Examples of misalignment are when an investor’s:

• Timeline doesn’t match your offering.

• Budget doesn’t meet your minimum.

• Investment criteria vastly differ from your offering.

The right questions early in a conversation help IR associates figure out what the investor is looking for. Identifying misalignment quickly saves time for all parties–and investors will be thankful for it. When GPs raise funds from investors with misaligned criteria, it tends to lead to challenges throughout

Misalignment doesn’t help anyone. A lead whose investment criteria clearly don’t align with your offering shouldn’t have additional time allocated to them. It’s best practice to put them into your nurture pipeline and move on to the next lead.

Discovery Helps You Understand How the Investor Actually Makes Decisions

Decision-making styles vary dramatically: analytical, speed-driven, risk-sensitive, or education-focused. The right questions provide answers that help IR associates identify a potential investor's persona and what they need to make an investment decision.

An IR associate’s goal in the sales process is to move someone from action to interest as quickly as possible. Identifying decision-making triggers helps IR associates:

• Determine what information the investor needs next.

• Shape how they pitch opportunities.

• Set the pace and structure of the follow-up.

Good discovery during the first meeting ensures the investor receives the right information in the right sequence.

Discovery Is the First Step Toward a High-Trust, High-Conversion Investor Journey

The first meeting is your chance to get to know the investor and introduce the opportunity. The conversation should focus on the investor's needs; the pitch should only establish alignment. Getting to know the investor provides the foundation you need to make the rest of the sales process relevant and targeted to that lead.

In our next article, we will discuss how to structure your initial Discover Call and set next steps that create momentum.