There is a myth out there among entrepreneurs looking for funding. I bought into it for a long time. It hurt me in my efforts at raising funding and it got in my way in other areas, too. It’s also a myth that many Venture Capitalists fuel, and perhaps buy into, themselves. But, a look at neuroscience will dispel this myth and make you more successful in the process.
Cut to the chase
A while back I was working with the founders of a company out of Santa Monica. They had a great team, a strong idea and good connections. They just couldn’t raise a round of funding, though. It was getting very frustrating and scary for them. As they sat in a course I was leading they told me about their latest attempts at fundraising.
“The worst meeting we had was with XYZ partners. We got there, excited to meet with them, they were behind schedule, so we had to wait. Then, when we walked in they said, ‘we don’t have a lot of time, so please, just cut to the chase…’ ”
“So, what did you do?” I asked?
They gave me quizzical looks and said, “Well, what were we supposed to do? We cut to the chase.”
“Do you know what I call that?” I replied, “I call that letting them ruin your meeting!” They’re in meetings all day long. But, this is your only meeting with them. Don’t let them ruin your meeting. Let them ruin someone else’s meeting.
The big myth
The root of the myth I’m talking about is the assumption that VCs are hard nosed, logical and only interested in the bottom line. While that may be part of the story, it’s definitely not the entire story.
Over the years I’ve had the chance to interview and talk with a lot of very successful and sophisticated VCs. Something that has struck me about them is that they have lots of money to give to the right projects, they don’t need to give that money to anyone, and they’re looking for reasons to say no.
The truly successful, sophisticated investors that I’ve met are clear about the fact that they want to be inspired. They hear good ideas all day long, day in and day out. Merely having a logically sound, likely to succeed idea is not enough. It’s necessary, but not sufficient.
Venture Capitalists are human, too. And, humans don’t take action from the logical part of the brain. Every functional human being, including VCs, engineers, finance people, and you, takes action from the emotional brain; the paleomammalian, emotional brain. This is true whether they believe they do, or not. And, that’s why I call cutting to the chase — getting right down to business without creating any kind of connection with your audience — letting them ruin you meeting. Heck, I know entrepreneurs who ruin their own meetings this way.
Don’t fall into the trap.
Of course, the myth is that it’s all facts, logic and spreadsheets. The more accurate, messy, human reality is that connection, inspiration and emotion play a much bigger part than people seem ready to admit. It doesn’t have be a hand-holding kumbaya-singing event.
The startup founders from Santa Monica I mentioned went out for another round of pitches a few weeks later and they were invited back to pitch that same group, again. Now, this was the group they liked the least, remember? It had been an awful experience. But, they went back and vowed not to open their pitch deck till they had made some sort of connection.
It turns out that the connection was centered on dogs. They all showed each other pictures of their dogs. They talked about how much they all loved dogs. And then they opened the pitch deck and the group they had their worst meeting ever with suddenly became their lead investor and is actively assisting them with raising more money.
Connect, inspire, motivate; that is how it really happens.