To Get Investment, Do Not Convince

By Benjamin Joffe

(Image: Network, 1973)

If there is one thing that the US Presidential election confirmed for many, it is this idea: you can’t convince people. Your job is to find the ones who believe the same thing as you do, and show them you are the right team. Let’s go into more details.

Haters, Believers, And Those Who Don’t Care

When introducing yourself to others, people will fall into three categories:

• Haters: they don’t believe in what you do, sometimes have seen something similar fail before and are generally ready to argue that it’s a bad idea.
• Those who don’t care: generally the vast majority. They are simply not interested and will look around and over your shoulder when talking with you.
• Believers: maybe 5% of a crowd? They believe the same thing and have been spending time thinking about its ins and outs. They finish your answers and build on them.

Figuring out quickly who is who — and it’s not hard — will save your time and sanity. Firstly because non-believers can’t be convinced in a short time. At best you’ll get them to start caring a bit, or review their position toward the center. If what you’re looking for is an investment or a sale, you need people to make a decision quickly, not argue endlessly. Your time is better spent finding more believers.

The Benefits Of Focusing On Believers

Not only it saves you time and makes every interaction more relaxed, but it de-dramatizes things like media coverage and other pitch contests — all part of the “Startup Theatre” surrounding you. Let’s say you’re pitching in front of 100 people. Your job is to make sure your message is crystal clear so that the 3 to 5 people who believe in the same thing come and talk to you. You then show you are the right team to bring the vision to life. Your job is NOT to convince the full 500 people, or a panel of judges.

Let’s Do The Maths

It doesn’t matter winning the public vote, what matters is that ONE investor will believe in you enough to lead a round. In other words, If the threshold for an investment decision is a 90% score in the mind of an investor, it doesn’t matter if a group puts you at an average of 10% or 80%. What matters is that ONE investor passes the 90% and leads. Of course, the more the better as it creates competition for your deal (as it could bring you better terms), but the popular vote doesn’t matter.

You Are The One

Yes, you are the one. For someone. And it really only takes one to close a funding round! Take in the comments of others to plug any major gap in your pitch, but don’t try convincing them. Once all the standard objections — and they will be clear quickly — are out of the way, an investment decision is down to belief in a particular future, and your team. Emphasize your vision, your team, your execution skills, and let your belief in a particular future be the first filter. Surprisingly, investors are rarely interested in the details of your product — they leave that up to you — except their “optics”: the appearance of your product can play a huge role (more so than the underlying technology).

Now go forth and meet your believers!

Originally published at sosv.com on January 24, 2017.