The One Question You Never Want VCs to Ask After Your Pitch
“Can you share your financial projections?” That’s the question you never want venture capitalists to ask after pitching them a pre-revenue or early-revenue startup.
When founders pitch properly, VCs don’t ask for financial projections because the VCs implicitly understand how much revenue is available and the plan for capturing it. In contrast, no matter how great you feel about your pitch, and no matter how enthusiastic the VC you’re pitching seems, a request for financial projections usually signals the end of any chance you have at raising money from that particular investor. Do you know why? Do you know how to avoid getting asked for your financial projections? If not, read on.
Why being asked for financial projections is bad
When potential investors ask for predictions about costs and profits on a pre or early revenue company, it’s not because they truly want to know how much money you’ll be generating 12, 24, 36 or more months into the future. Nobody could predict that accurately. Instead, the request highlights a misalignment in vision. By asking founders to explicitly state revenue potential, investors are indirectly saying the pitch they just watched didn’t make a clear and compelling case for the overall market opportunity.
