This column is by Anjli Jain, Managing Partner at EVC
As I decide to write this in a conference room after a long meeting, one of my LP chuckles. Do you really want to do this today? I am a woman and I am an Indian, I laugh back. There is always something else that can be done “around the house” for the Indian women.
Plus an investor in early stage startups. What comes below are few actionable tips on how to make an investor notice you and fall for you. I intend to break few clichés we are all used to hear so pay close attention.
Forget the story of the founders, talk market size instead
How many times have you heard that the personal story of the founders matters? Guess what – It matters not as much. What matters more for an investor is the size of the market you plan to serve so you might want to keep your personal investment into the problem for the very end. Talk numbers and market estimates to them. Show them a billion dollar market opportunity could exist. That’s the sweetness they want to hear. If you start a rich debate around the estimated size of the market consider yourself to be on the right track and remember – do not argue with an investor over the market size estimation.
Never contact investors directly
You might have heard this already but it is worth putting it into the spotlight once again. Do not cold email investors. Your chances of success are minimum, close to zero. Instead find out who they know and make sure they are aware about you. Investors get their most confidant deals sourced from their own network of people they trust and listen. Find who they are and then ensure that they know about you.
Never contact investors unless you have some revenues ready
I have stopped debating around this. Zero revenues means you are wasting my time no matter the potential size of the market you are uncovering and the grandiosity of your idea. I am surprised by the sheer number of rookie founders who think it is their birthright to get money pumped up just because their startup is an Internet startup. Show me the money first. Then we will talk.
What have you done?
Investors hate hearing an idea and nothing has been executed on it. The number one thing investors look at is if a team can execute.
What is your unique insight?
Larry Page’s hiring approach is unique. It is said that he brings his hiring decision in the first 20 second during the interview and if he is not fan of the candidate he at least ensures that the remaining time is well spent by asking the interview to tell him something unique, something he doesn’t know.
Apply the Larry Page principle while pitching to investors. This is the one sentence you say that shows investors how differently you are thinking about something. A unique insight will be something you have taught the investor. Are you ready to teach me something today?
Meet with all the investors you have in mind around the same time
Threat the hunt for investors as another sales activity. Group your largest and most similar prospects into one cohort and meet them all in one season. Do not make your pitch for investor an all-year activity, because you have a company to build. Instead put up a time table and get it done at once. Don’t have random one-off meetings with investors. If you want to fundraise, you should devote a couple months to it. Being in a perpetual fundraising mode is distracting and bad for your startup’s health.
Try to make the meeting in the afternoon
This is another well known secret of the world’s best salesmen and negotiators. They ensure that their sales meeting are scheduled for later in the day when their counterparts are likely to be on the verge of their energies. That makes it easier for them to overpower the latter during the negotiation process. See if it works for you and do not forget to have a long sleep on the day of the pitch. Don’t tell anyone I taught you this one.
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Image Credit: CNBC