I’ve always been told that it’s not what you say that matters most but what people hear. This is something that I find a lot of people don’t generally think about ahead of time, especially founders when they pitch investors. You have a limited amount of time to get your message across, so make sure that you’re clear, consistent and right to the point.
So lets just jump into it with a few:
Founder: Before we start, can you sign this NDA?
Investor: HA!
Founder: Our mutual friend recommended I reach out
Investor: Do you really know them or did you make small chat at an event?
Founder: I would love to pick your brain sometime
Investor: Hmmm maybe you could be more specific?
Founder: Maybe we could meet up for coffee sometime?
Investor: I already drink enough but it would be nice if you sent specific dates so we don’t have to go back and forth
Founder: [in email] Let me know if you would like to learn more and I’ll send over our deck
Investor: Please send over your deck
Founder: Our company name is Widget.ai.io.ly.com
Investor: That’s a weird name — why would they choose that? I hope there is a good reason and not just what they could purchase.
Founder: We are the X for Y but with AI, neural networks and some blockchain sprinkled in there but utilizing edge computing. Maybe ICO too.
Investor: Jargon jargon jargon hopefully they can back this up and actually have it, not just want to aspire to it.
Founder: We are the first to do this and have no competition. Check out this awesome arbitrary chart with us in the top right corner.
Investor: That’s not true and I just met with a dozen similar startups with more traction.
Founder: We’re in talks and working with a lot of companies right now but we can’t tell you who — so much interest from the Fortune 100.
Investor: So a bunch of free trials for 3–6months that will only convert a few.
Founder: We’re trying to raise a few hundred thousand dollars to build out some features and make a few hires
Investor: Sounds a little wishy washy like you don’t know what you’re doing and aren’t in control.
Founder: We’re waiting on the lead to set the terms
Investor: Eh ok but do you have something in mind you would like?
Founder: We have a lot of interest but no one will commit until we have a lead investor
Investor: Yah that’s typical — most of us will wait until you have a lead to round us all up.
Founder: We have a lead investor!
Investor: I really hope this is true and you’re not stretching the truth. Also hopefully it’s a well known VC and not a weird/first timer that hasn’t done this before.
Founder: We have the best advisors from the top companies.
Investor: A few head-shots of people you talk to sporadically.
Founder: We’re projecting $100M of revenue in 5vyrs.
Investor: Good luck with that — most likely double your expenses and half your rev for the first few years.
Founder: We’re projecting $10M of revenue in 5 yrs.
Investor: Ugh that’s not enough for us…
Founder: We’ll breakeven by the end of the year.
Investor: That’s nice and I hope it actually happens.
Founder: Are there any other investors who you think would be interested?
Investor: Don’t worry, if there are, I will definitely share it with them.
Founder: My friend/family is currently doing legal for us.
Investor: That will have to change ASAP.
Founder: Google, Apple, Facebook and/or Amazon will acquire us when we beat them because they can’t do what we do.
Investor: Sure of course — do you even know anyone there?
To clarify this is generally for pre-seed/seed investments so there isn’t much to show very early on — living on hopium at this point. However, in my next post, I will show you how you can turn these basic phrases and throwaway terms into real meaningful conversations that will excite any investor. Yes it takes work but I promise you it will pay off.
