What Entrepreneurs Can Learn From the 5 Craziest Investor Meetings I've Had With Founders
Grow Your Business, Not Your Inbox
As a startup founder, a huge amount is staked on your ability to fundraise. Investment means you have something to live on while you turn your idea into a reality. It allows you to hire and spend money on the things you need to get your startup off the ground. Funding means survival.
As an investor, I appreciate these high stakes and the passion of entrepreneurs who just want someone to believe in their vision. However, sometimes that can go a little too far. I’ve had a number of crazy investor meetings over the course of my career, and each of these extreme cases has yielded some valuable insights of what to do, and more importantly, what not to do, when raising venture capital.
1. Dancing seals
Perhaps the most memorable investor meeting I ever had was when the founders showed up wearing dancing seal suits. That’s right: dancing seal suits. They thought that this tactic would be the best way to attract attention and be memorable. They certainly achieved their goal on that front, and I have to give them credit for creative marketing but creativity points only get you so far. I did not invest.
Related: How the Top VCs Want to Be Pitched
The takeaway here is that getting noticed, and even getting a pitch meeting, is only a tiny portion of the battle. Then the responsibility is on the entrepreneurs to make a strong and compelling case. If you are going to try over-the-top strategies, then make sure you have the research and expertise to deliver when given the chance.
2. Burn baby, burn
One time, an entrepreneur asked me to burn the pitch materials -- and wanted proof. Even worse, this was not the first or only time an entrepreneur has asked me to do this. In fact, we’ve had multiple entrepreneurs ask if we will burn pitch materials or sign confidentiality agreements, even before meetings start.
While I understand the fear that someone will “steal” a precious idea, these requests speak to one of the biggest problems I see over and over again in pitch meetings: Entrepreneurs often think that the idea they have is everything.
The idea is about 1 percent of the project. The other 99 percent is having the knowledge to run and follow through with a business. Many entrepreneurs become so focused on the uniqueness of their idea and on the need to protect it that they lose focus on building a business. Moreover, asking investors if they will burn materials before a meeting ever starts is basically a declaration that the entrepreneurs do not expect for the deal to happen. Why would we give someone a deal who is already doubting that they will get it?
There is a fine line between persistence and stalking. Being persistent about a pitch is often necessary, and even admirable. Stalking is neither, and entrepreneurs who hope to get anywhere with investors need to navigate that line carefully. When founders have crossed this line in the past, we are polite and tell them to be patient. We’ve had entrepreneurs who apologize for being overly aggressive and then continue to be just as aggressive as before. The important thing to remember is that if a VC is interested in moving forward, the entrepreneur will know.
4. Time and place
Investors are normal people with their own lives, which entrepreneurs can sometimes lose sight of in their eagerness to be heard. I was once flagged down in a foreign country and pitched at the crack of dawn. It was the second day of my vacation in Vietnam and a man on a tuk tuk started calling my name. My first reaction was, “Is this person trying to kill or rob me?” My second reaction was, “Is this someone I met before who I should know?”
The man recognized me from my podcasts and website and started pitching me on his idea. I ended up spending part of my vacation in a pitch meeting with him. Granted, if the pitch had been amazing, I would have been more open to listening, but his effort was unsuccessful for a variety of reasons. If you do happen to encounter an investor you would like to meet with in an unconventional setting (vacation, bathroom or restaurant, to name a few), then at the very most, ask for a more formal meeting where a pitch is more appropriate and welcome.
5. 'Moral' support
Pitch meetings can be very stressful for entrepreneurs, and there is nothing wrong with having a support network in place but that does not mean that support network should accompany you to meetings.
About once a month, or about one out of every 50 meetings, a founder brings his or her significant other in with them. This person often has no ties to the business. When trying to learn roles of the company and the business, I would ask that person what their role is and they often do not have a valid response. Despite this, they will still answer questions and speak for the entrepreneur.
From my side of the table, this gives the impression that the entrepreneur can’t even handle a pitch meeting. If they can’t handle a pitch meeting, how will they handle running a business? Bringing a significant other shows unpreparedness and a lack of confidence.
At the end of the day, the most important factor in a VC meeting is to be well-prepared, with a strong idea, pitch and case for how your team can execute on your vision. When it comes down to it, what we are looking for is rather simple and does not require panda suits or stalking. Entrepreneurs’ goal should be to convince investors of your competence (and sanity), and these crazy tactics often have the opposite effect.
Related: 4 Insider Tips From VCs