How many investors have you spoken to?
I often speak to CEO’s bemused by the lack of funding that their pitch has generated so far. In many cases they have had several conversations with investors and feel frustration that “They just don’t get it.”
Add a healthy portion of misunderstanding, a serving of stubbornness and top it with a helping of no idea about how the world of funding really works and you now have the CEO profile of where I usually meet people on their funding journey.
The biggest mistake
I hear it all of the time: long, rambling, confusing explanations designed for those who know and understand the industry that they are in. They often leave me confused because they take a long time to not answer the questions that I ask them, convinced that there is something else that I need to get before they answer my question(s).
If you are seeking funding, it is essential for you to see building the relationship as your primary goal when you are talking to investors
If an investor likes you, they may not want to invest themselves, but may introduce you to someone who could. Vomiting unsought information with the belief that it is really important for an investor to know, even if they haven’t asked, is a big mistake. To put it simply: if you cannot tell them what they have asked for, they will likely not be very receptive to what they haven’t.
Keep your communication dynamic
If you need any more than 30 seconds to answer a funding question, it is likely that it’s because you know you don’t have a good answer or worst still; haven’t even thought about it but don’t want to admit it. Talking about something else in this instance, often in the hope that it will offset the need to give a good answer to the question asked, is very frustrating to be on the receiving end of.
Your litmus test: can you answer each of the following with confidence and in under 30 seconds:
- What does your business do?
- What problem do you solve?
- Who are your audience?
- How do you know that there is a demand?
- What is your rollout strategy?
- What is your Unique Selling Point? (USP)
- If so, does it have a patent? Are you applying for one?
- Do you have any agreements in place?
- Have you invested any of your own money? (Talking about sweat equity here is generally not a good idea)
- What is the money for? (Most investors will want to see a detailed breakdown of this)
- How long will the money last?
- What stage will the company be at by then?
If you can answer all of those with confidence in under 30 seconds, you are probably ready to speak to investors.
If you can’t, you would benefit from a chat with me.
Get in touch/send me your executive summary to firstname.lastname@example.org and I’ll give you a free review of your proposal, along with suggestions of your best next steps.
Thank you to jeshoots.com for the image.