I recently completed a 4-part series on the nitty-gritty details of actually (really) getting funded. You can check that out here, and the more I wrote, the more I realized the breadth and depth of this topic and how much wasn't being talked about. In Part Three I talked specifically about how to speak the language of investors, not inventors, and how important learning that investment language truly is to getting funded.
But There's More To This Than Just The Language Throughout that series, I talked about getting your pitch right, and being coachable, but it's actually even more than that. Entrepreneurs have their work cut out for them if they wish to intrigue investors and get that 'yes' they are looking for, and I don't think a lot of entrepreneurs go into potential funding situations aware of this. So let's talk about how you can make yourself a fundable founder.
- Be Open: If you aren't listening, you won't hear anything. Investors deal with potential partners often, and they can quickly and easily see gaps. They will even share that information with you, and if you aren't listening, you are missing out on free advice right from the mouth of an expert. If you are listening, but unwilling to hear constructive criticism, or an alternate approach you hadn't considered, how are you an entrepreneur? I am kidding. Kind of. You have to be open to possible growth or direction, and at the very least willing to converse about those potential options without melting. Inventors can be very protective of their inventions, and why wouldn't they be? Their blood, sweat, and tears is poured in, so I understand that, but there has to be a willingness for give and take. Investors can sense this, and will back away quickly if they feel you are not well-versed in compromise, which is the true language of business.
- Be Honest: Authenticity goes a long way. When the talk turns to money and your dreams, it is so easy to switch on that salesman ooze, especially if we haven't trained ourselves to present in other ways. Nobody wants to feel as if they are being turned over by a used car salesman. Your pitch should be perfected, yes, but also honest. No matter how many times you practice that pitch, your passion (if you are passionate) for what you are 'selling' never goes away. If anything, it grows with your comfort level. And while we are talking about authenticity, even though robots and AR are the up-and-coming tech, robotic presentations are never perceived in a way that will help you advance.
- DO NOT Fudge Numbers: I know, I know.This goes hand-and-hand with being honest but I really feel the need to point this out because it's easy to round up when you want to make that deal, but the details always come out, and this will not end well in any way. Period. Not only that, what will follow is a tainted reputation you may never clean up. If it's unintentional, that may even be worse. So if you accidentally fudge numbers because you don't know your numbers... it won't go well either. Your numbers need to show everything from cost breakdown to potential for growth, profit projections, cash flow needed to stock inventory and support projected growth (something that is almost always underestimated), and an eventual exit. If you don't have this, you aren't quite fundable yet. I cannot argue the point that it takes an unusual amount of optimism to be an entrepreneur but don't let that carry you into a delusional realm of inflated milestones and stretched statistics. In addition to knowing the numbers, you need to be comfortable talking about the numbers. Every single digit carries weight and should be treated as such.
- Be Ready To Do Work: Like, a lot. My experience over the past 20 years has taught me that very few people a) have what it takes to be a successful entrepreneur and b) even realize how much actual work is involved in the aforementioned process. There will be days you've lost your voice because you pitched 10 times and still have calls to make. There will be long days that turn into long nights with a to-do list that seems never ending. There will be setback after setback, and you will have to pivot as you figure out the landscape. There will be plenty of 'no's' before you get to your very first 'yes' and plenty more 'no's' that will follow it. There will be entire weeks you might feel as if you are spinning your wheels and you most certainly will contemplate walking away. The risks entrepreneurs take, for the ultimate reward of every kind of freedom you can imagine, take their toll. The road is not easy, or everyone would be on it. So you have to be ready to dig in your heels and weather the storm. You have to be ready to put that sweat equity in, if you want to take anything out. Of all the quotes in the world about hard work, my favorite is from American cultural anthropologist and author Margaret Mead, who said, "I learned the value of hard work by working hard."
- Get Market Proof: Are you tired of me talking about market proof yet? I know, I know. But market proof is usually the one thing standing between an entrepreneur and a potential investor. That 'yes' you are seeking relies heavily on whether or not you have something people want, and there's actually a little more to it than just that. You see, investors want to know your level of dedication. How willing were you to put yourself and your product/business out there? How much time and effort did you put into getting people interested in what you were selling? It's almost not enough anymore to just have a working prototype, without having done anything with production. There are things you would only know if you attempted to get your product on the market. Like knowing how easy (or incredibly difficult) it is to enter that market in the first place. Or understanding how to gain traction, and how long it might take to ramp up. You have to do the legwork if you want the backing.
This is only the beginning, and if you're doing it right, you will continue to grow. As you do, you will also continue to learn what your investors need from you to maintain a thriving partnership built on trust, honest communication, and ...ahem... lots of profit.