I was recently reading an article about feedback from Investors. I was thinking about how I can help startups to interpret what investors are truly saying.
One investor on twitter under a pseudonym was highlighting what investors really mean from their different commentary feedback. I found it extremely useful for startups, if they are getting ready to pitch.
So here are the five different scenarios and what they truly mean.
1. During a pitch, if the investors say: "Great team!" "Cool product" "Great Idea" "When will that launch" "Who else is using this" "When does this go live"
What are Investors inwardly thinking?
The above comments mean that they consider your product is bad.
2. During a pitch, if the investors’ comments are:
"Why hasn't anyone done this yet" "Who else is building this" "What if Google / Apple / Facebook did this?"
What are Investors inwardly thinking?
We are definitely not impressed by your team.
3. During a pitch, if the investors ask:
"Who else is investing" "How much have you raised in this round" "How is the round going" "Let me circle with my team" "How much are you looking to raise" "Do you have terms set yet"
So what is really going on in the investor’s mind?
We don’t have the conviction to invest in your start-up.
4. During a pitch, if the investors ask:
"How big is this market" "Who is your real customer" "How big can this get" "How big is your addressable market" "How does this get to a 10 billion outcome"
So what is really going on in the investor’s mind?
The investors don't understand your market and will not invest.
5. When the investor says to you:
“I will introduce you to three other people who can help you”
“I want you to speak to each of them”
So what is really going on in the investor’s mind?
The investors are thinking of investing in you but they can be very herd-like and often need the validation of others investing with them before they will put the money in.
Seeking and receiving funding is a two way process. As startups you have to also feel comfortable with the investors who decide to fund your business.
The best investors will start adding value after the first meeting if they love what you do and who you are and will make sure you meet your milestones in the roadmap that you would have outlined.
Feel free to leave comments about examples of your pitch experiences.