Rethink the Objective for Investor Meetings
Frame your pitch in a way that makes investors feel like they can't walk away from the opportunity.
Welcome to summer! We hope you had a great short week.
đ Thought Bubble: âCanât Say Noâ
Last weekâs VC Minute segments featured Brandon Brooks, founding partner of Overlooked Ventures & founder of Zinsu. In those episodes, he discusses the fundraising process for founders âoutside the linesâ. In other words, founders from underrepresented backgrounds and/or outside of the typical hubs of the Bay Area, NYC, and Boston. He brings up some great fundraising advice, including finding your early believers and parlaying that into network expansion.Â
One particularly unique insight he has in episode 110 is reframing the goal of getting an investor to a yes. Brandon believes a better goal is to get investors to a point where they just canât say no to the opportunity.Â
This inversion is an intriguing way to think about getting an investor to commit, especially in the early conversations when investors are really looking for any reason to say no. Even for topics where an investor has extensive experience or knowledge, the decision to invest is not usually an immediate yes. Investors donât know everything about everything (despite what they might tell you đ), and there is work they need to do to build conviction.Â
As episode 26 discusses, your goal in investor conversations is to get to the next meeting, and one tactic to use is to give investors something they canât say no to. In other words, give them something that makes them think theyâll regret passing on the opportunity. To do this effectively, you have to be able to tell a compelling story about why your business is a canât-miss opportunity.Â
This is where âmessaging-market fitâ (episode 111) becomes critical. The time you spend with investors in those initial conversations is short. You should be focused on building the relationship and getting investors to continue the conversation. That means aligning your story to what the investor thinks is most important and honing your discussion of the business to the most critical elements. If itâs an investment firm that cares solely about financial returns (most investors), you have to paint the picture of why and how this becomes a massive business. Highlight any early indicators you have to support this, such as early data showing rapidly growing revenue, users, and/or utilization.Â
Youâre probably tired of hearing this by now, but at the earliest stages of investing, team is a heavily weighted piece of criteria. Demonstrate the unique insight you have that will make you successful in capturing meaningful market share. In other words, show founder-market fit; i.e., the blend of experience, skills, and insights that you and the founding team bring to the table that gives you a competitive advantage.Â
Even though we all know getting an investor to a yes is almost impossible on the first meeting, the weight of that ultimate goal of investment can be heavy in early conversations. It can feel nearly insurmountable to think about everything that needs to align to get investors to commit. Instead, a helpful way to reframe those early conversations is to flip the objective and deliver compelling evidence that an investor canât walk away from.
đ§ Podcast: 3 Ways VCs Say "No" Without Saying "No"
Bolster has a great podcast featuring Jenny Fielding that discusses how investors say ânoâ without saying ânoâ. Itâs a short episode (link here), but the key takeaway is be wary of an investor that does any of the following:
𧔠The string-along: Consistently moves the goal post of what theyâd like to see;
đ» Half ghosting: Responds but only provides short, often one-word, answers to emails; or
đŠ The early bird: Tells you youâre too early but to keep in touch.
If youâre getting any of these signals, deprioritize that investor. Theyâre probably not that into your company, at least right now.
The Daily Bolster is a great addition to your podcast player â you know we love daily episodes!
đ Pitch Deck Must-Haves
A common question we get from founders who have never fundraised is what to include in the investor pitch deck. This table posted on LinkedIn by Adeo Ressi (post here) is a useful comparison of what different investors and founders prefer to include. While there is variation, some topics, like problem and competition, are universal must-haves.
đ” Raising from Angels vs. VCs
Another common question we field from founders raising their first round of capital is whether they should raise from angel investors or venture capitalists. Hustle Fundâs latest Founder Blog entry discusses the pros and cons of raising from each. A big benefit of raising from angels is that they can move quickly because theyâre investing their own money. The downside is that they usually write smaller checks. On the other hand, VCs write larger checks but have a longer process and a fiduciary responsibility to their limited partners, the folks who invested in their fund, meaning they canât be as flexible as some angels on outcome potential. If youâre unsure of which investor type is right for you, this blog entry is a good primer.
đŽ Decompression Zone
When youâre building a company, moving from one fire to the next, itâs easy to lose perspective. Thatâs why this week we are highlighting the podcast, Great Mysteries of Physics. If youâre looking for a mindless listen, this certainly isnât it, but the topics they cover force you to pull upâway upâand will definitely get you out of the minutiae.
Have a fantastic weekend! đ