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Fundraising is a lot like dating; it helps to listen carefully, respond thoughtfully, and be a little indifferent

Posted Nov 18, 2014

Talat Imran
Talat Imran

Awkwardness

If you think about it, the comparisons are actually pretty striking. You meet someone through mutual connections, filling out online profiles, or by going to events and mingling. You try to say something compelling to “recommend” yourself to them so you can get their number/email/FB/etc. That description could equally apply to fundraising or finding a mate, but hopefully not both at the same time! That would be a completely different blog post. Let’s not go there…

I can’t really help you with getting that first date, because I am a software developer with the game of a software developer. But here are some of the (many) lessons I’ve learned over the years:

Listen carefully: This is one of the biggest mistakes I see entrepreneurs make. You’ve prepped like crazy. Maybe you’ve practiced your pitch in front of your friends and you think you know exactly what you’ll say and exactly when you’ll say it. Then you go into the meeting, and the VC says “let’s jump to slide 22.” And you lose your ability to function. I’ve seen it happen: brain freeze.

Being a dictionary-definition bore, however, is an even better way to destroy your chances with an investor. I have a fascination with AI. Specifically neural networks and directed learning algorithms. I’m not an expert, by any means, but I am at least familiar with the basics. An entrepreneur came in to pitch me once with a neural network-based diagnostic tool. I had read the deck carefully and had a number of specific questions about the business model. I started the meeting by giving a preamble on my background, and what I wanted to focus on. I gave him the goal posts and pointed him towards them. But after I was finished, the entrepreneur decided to spend half the meeting explaining what a neural network is and how directed learning works. He took what should have been a productive meeting and turned it into a teaching moment for whoever reads this blog post.

That was particularly ham-fisted, but I find that most entrepreneurs do this, albeit more subtly. It makes me wonder how they will fare with their customers. If you can’t listen carefully to the person in front of you, you most assuredly won’t be able to…

…Respond thoughtfully: VCs, as a rule, are not going to be confused with a group of ascetic monks. Put another way, they tend to have healthy egos. Nothing will damage your ability to connect more than failing to acknowledge their questions and concerns. Having thought out the types of questions you may be posed with and planning satisfactory answers is a good thing. That might sound like it runs counter to the advice from the previous bullet, but there’s a big difference between being prepared to answer a question and blurting out everything you feel the need to say.

Be a little indifferent: I know, I know. Some people might take issue with this. But it is THE most important thing. The reality is that most people, and certainly most VCs, want to feel like they’re getting access to something special. If you’re too eager, too available or don’t have any other suitors lined up, you’re putting yourself at their mercy. It’s like telling someone you’re in love with them at the beginning of a relationship. While it may seem like a good idea at the time, you’re probably not setting yourself up for success. Not that I have any personal experience with that…

In all seriousness, anyone who has been in a term sheet negotiation knows the value of having multiple options. Play a little hard to get.

There are plenty of other similarities one could touch upon, like good personal hygiene or punctuality. But hopefully those are obvious. What I’ve emphasized here are the parts that are specifically the most difficult for an entrepreneur. If you’ve taken the plunge and started your own business, I bet you love talking about it and are fixated on getting funding. Try and focus on the person across the table from you, on their questions, concerns and desires, and you’ll do a lot better in the end.

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