Founders need to pitch to investors all the time. You need to woo them if you want to engage with them, and unless you can get into their heart and their brains, you’re not going to be able to get into their wallet. This is why you need to learn to empathise with them, so you can understand what their world view is.
Pitching Equals Dating
Do you remember when you were wooing your first girlfriend ? Before you made your first move, you tried to find out as much as you could about her. You tracked her for some time; you figured out what she liked and what she didn’t, and you tried to learn more about her interests so that you’d have common topics of conversation. You tried your best to charm her and you need to do exactly the same thing for the investor.
What is in his present portfolio? What are his extracurricular interests? Look for common ground which you can use to start a conversation.
This is common sense, and because investors are human, he will be gratified that you’ve taken the time and trouble to do your homework before reaching out to him. No one wants to read a tired, recycled, standard generic pitch. This is why you need a very precise targetted approach, rather than trying to use a machine gun to spam every investor’s email you can lay your hands on .
Before you reached out to your prospective girlfriend, you talked to her friends first, and tried to convince them to put in a good word for you, so she’d realise what a cool dude you were. The same rules apply. Try to get a warm introduction , because this makes it much easier for you to open the door to the investor’s office. He’s also much more likely to give you a patient hearing because he trusts his contact has done his due diligence before connecting the two of you.
Related Article: Common Mistakes Founders Make When Pitching To Investors
Remember that the investors default response is always No because he is trying to conserve his bandwidth. He is swamped by prospective founders, and you need to be able to convince him that you’re the right person for him.
For example, it’s a good idea to make a list of all the common questions, objections, worries and doubts which he may have. Try to anticipate these and answer them proactively. He will be able to see that you’ve done your homework, and this will allow him to move on to a more detailed discussion, so he can dig more deeply into your business model.
Conversation is a two-way street, and just like you hope to get his money, he also hopes to become a little bit smarter as a result of talking with you.
Not only should you be happy to share information, you should also try to learn from his insights. Investors have tonnes of experience and have dealt with lots of founders. He’ll be able to point out the flaws and pitfalls in your business model, and thus reduce your risk of failure.
Create A Rejection List
Just like investors create an anti-portfolio, you need to create a list of investors whom you’ve reached out to but who didn’t fund you. This may seem counter-intuitive – after all, why should you bother to talk to people who’ve said no to you in the past ? The reality is that the startup ecosystem is a small world, and you are quite likely to come across that same investor in a new avatar down the road.
If you’ve taken the time and trouble to remain in touch, he’ll be able to see how much progress you’ve made, and this will inspire confidence. Also, other prospective investors will ask him for his opinion about you, which is why it’s a good idea to remain in contact.
This doesn’t mean that you need to divulge confidential information to him, but you should be able to show him that your company is making progress. For example, you can send out monthly emails to all your well-wishers, and you can request him for permission to add his name to this. This will allow you to differentiate yourself from other founders, and since you never know how he maybe able to assist you in the future, please take the effort to stay in touch with all people you have reached out to for help.
[This article was first published here by Aniruddha Malpani and has been reproduced with permission.]