A founder-turned-investor on how to perfect your startup pitch

Being pitched to by ill-prepared, ill-informed or immature entrepreneurs is not much fun for most investors.

Having been on both sides of the table, I realised that I had a unique perspective in helping to bring founders and investors together.

So in the spirit of helping to connect both, it’s worth sharing some insights.

As a founder, though the odds may be stacked against you, it is possible to gain investment for your ‘brave new venture’. But things don’t always go according to plan.

When that happens, the polite investors that I know gently guide and give positive feedback; the more aggressive or insensitive of our ‘tribe’ of investors are less compassionate and more direct, which I’ve witnessed more than a few times.

Though the outcome is the same – “no” – the outcome of such misdirected aggression and disrespect can lend itself to those weaker recipients tending to disappear, never to present themselves again.

Some of us might say that this is trial by fire or ‘if you can’t stand the heat….’, and that taking a direct view is a way of sorting those that can take criticism and rise from it, stronger and wiser, and better prepared than those that can’t.

I prefer to take a different view – we as successful entrepreneurs-come investors can vividly remember our own paths to success; the challenges and opportunities; of falling over & getting back up again – and of the help & guidance that we received along the way, as we tried (and often failed) to discover our path forward.

The reality is that most won’t succeed – almost certainly not in your first ventures – but that doesn’t mean that we have to degrade, disrespect or denigrate someone who is searching and seeking to become that which they have imagined.

Often times for many investors we have to remind ourselves that the aspiring entrepreneur is not their business model, their value proposition, their idea, or their path to market.

These are just vehicles, from which they seek to achieve their vision of becoming a successful entrepreneur.

Resilience- the capacity to get up again after being knocked down- is a trait learnt over time. But as investors, we don’t and shouldn’t make that any harder than it already is – life and experience will naturally take care of that soon enough.

No, our job is to be as engaging, inspiring and supportive as our time, emotional intelligence and capacity allows, in order that the second, third -or later -venture is the one that ultimately works.

And for aspiring entrepreneurs, they have an equally hard job: to learn, study, prepare and engage, not as amateurs, but as professionals.

Which means that they must do their homework, before approaching investors.

Here’s a small but important list of examples:

  • What spaces have they invested in?
  • What sectors do they like?
  • What are the attributes that are important to them?
  • Do you know someone (trusted) that can introduce you?
  • Are you clear about the value that you are trying to create?
  • Are you honest about what you do and don’t know?
  • Are you teachable (and can demonstrate it by actions)?
  • Do you meet all their criteria?
  • Often the biggest challenge for investors (a bit like panning for gold), is the patience to ‘swirl the pan’ until those little flecks of gold appear – those ‘bright shiny objects’ that catch our eyes as they glint in the sunlight.

As entrepreneurs, you must also remember that an investor who is looking for gold may not see the rubies, pearls, diamond and silver along the way. Or they may see them but not notice or recognise their value.

It’s equally true that the pearl prospector may not notice the sunken golden treasure as they swim past it.

Just because an individual investor doesn’t see your value, doesn’t mean you don’t have it – it just may be that they are looking for something else.

So by doing your ‘homework’, you not only maximise your chance of success when approaching, you respect their time and experience, you also save your own valuable time in not approaching the wrong type of investor, and come across as significantly better prepared and more professional than the last 10 pitches or proposals that we have seen.

And here’s a little secret that most entrepreneurs fail to grasp: “Birds of a feather flock together.” Investors spend time with other investors, and we talk. We talk about the great deals we’ve invested in, the inspiring pitches we’ve seen, and occasionally, the outright amateurish approaches that we often receive.

I can’t tell you how many times I’ve been asked: “Did you get a copy of blah,blah’s pitch deck? What a disaster!”

As Shelli Trung reminded me yesterday, sometimes it takes investors 3-6 months to do their due dilligence, so when investors say “keep in touch”, they often really do mean it.

As investors, we aren’t rushing to be part of a herd that wastes our investment capital. Despite what you might have read, most market sectors are not an “arm’s race” – most money doesn’t always win; and we don’t all race in to ‘hot’ sectors.

Often, the companies that ‘win’, have last, not first-mover advantage – think Amazon, Apple, Microsoft and Google.

And nor do we race to invest in ‘opportunities’ that have already been discovered and uncovered. Which is why the ‘Uber for X’ is so passé in a pitch deck – Uber is still working on being the Uber for everything, so move on to something that we haven’t all see 100 times before.

We all have our own individual investment ethos but the last thing we want to do is invest too early or too late in a space.

But I can guarantee you that we want to invest, we want to participate, we want to be inspired and engaged, and we want to get a return on investment, both for you, and for us.

And I can also guarantee you that most investors didn’t make their money by being wasteful, gullible or easily conned. Many a ‘clever whiz-kid’, has tried to extract money from a canny investor with a slick presentation.

Unfortunately for those whiz kids, the value of experience, caution, and the power of “no” is against them.

But that’s not you, is it? Instead, you:

  • Prepare, plan, and present properly
  • Demonstrate enthusiasm, passion and respect
  • Embody integrity, persuasiveness and commitment
  • Know how the value can be created and shared
  • Can recognise that it’s not the investment that will really help you succeed
  • And if you are really good, we just might recognise a little of our former selves in you

This piece was originally published on LinkedIn.

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