Sometimes I meet founders who have done dozens of meetings with investors but have generated zero interest. People often struggle in fundraising because they’re ignoring the basics of meeting investors. Here’s how to be successful in your investor meetings:
At the seed stage, most products have minimal traction, so investors usually focus on the team as a determining factor. On a call, the investor may not be 100% focused on your pitch, it’s harder for you to read their reactions and very difficult to perform a memorable demo. In person, you have much more of an opportunity to show how good you are.
Don’t:Don’t accept calls for first meetings with investors unless absolutely necessary, i.e. they can’t meet with you any other way for 4+ weeks.
Do:Make most of your 1st meetings with investors in-person. If the investor prefers a call, use materials, like an email deck, to entice them into a face to face meeting. For investors outside of your location (or as a last resort), you can offer video chat as a backup.
Fundraising involves receiving lots of noes, regardless of who you are or your company. Many founders struggle with the constant knocks to their confidence and can appear downtrodden in meetings. Confidence is critical to a good meeting but it’s easy to go too far and create an impression of arrogance.
Don’t:Don’t brag about other investors you’re talking to — most will say ‘no’ and serve as negative references if contacted. Don’t get defensive when questions are asked or set near term deadlines for the round’s closing.
Do:Describe your company’s product and wins with pride but stop short of predicting global dominance. Research the investor, so you can fuel the conversation early and explain why you think they can help, beyond a check. Be on time.
Investors will say ‘no’ for all kinds of reasons, and often they won’t tell you the real reason. Most of the time you can discount the feedback from an individual investor. However, if the same tough questions keep coming up from multiple different investors, you’ll need to prepare for the next meeting.
Don’t:Don’t ignore patterns in investor questions and provide reactive answers each time. Investors talk to each other a lot when considering investments, they are likely to share their primary questions and concerns.
Do:Follow up after the meeting, thanking them for their time and giving answers to any outstanding questions. Track tough questions as they come up and when they’re repeated, prepare your answers in advance. Ideally, you’d have a slide in your deck’s appendix addressing the question. This serves as a visual aid for you and the investor, as well as demonstrating your diligent preparation.
Fundraising is already an extremely challenging environment, it’s almost impossible if you make basic errors. Meet in person, be humble, be prepared and you will give yourself the best chance of getting yeses in those early meetings.
This article is part of a series on Seed Fundraising:1. When to Raise Money2. How to Build a Deck3. The Basics of Meetings4. VCs vs Seed Funds vs Angels5. How to get a Meeting6. The 5 Most Common Pitch Mistakes7. How to get Early Momentum8. How to Handle an Angel Investor Meeting9. How to Close the Lead Investor10. 4 Investor Gotcha Questions11. 10 Traits of Successful Founders
If you’re a B2B company at the seed stage looking for help, you can reach me at [email protected]
Thanks to Kaego Rust and David Smooke for their help on this article.Photo by Alexandr Podvalny.