Sorry, startup folks: There’s no sure-fire formula for squeezing money out of investors. But, if perhaps there’s a sure-fire way to scare investors off, it’s to come off as overly cocky. If you smugly show up and show off while pitching them, you’ll likely walk away empty-handed.
So says Cavan Canavan, CEO of FocusMotion, a Santa Monica, Calif.-based wearables software development platform (SDK) provider that he co-founded in 2013. The veteran sneaker designer and former Apple marketing intern admits it took him and his team a while to learn this lesson, and they learned it the hard way -- a few times.
“As far as walking in and saying ‘Ta-Da! Here’s technology. Give me money,’ that doesn’t work,” he told Entrepreneur at a recent Virgin Galactic event in Los Angeles.
What does, he says, is to “Know who you’re pitching to and know what they’re listening for.” When wooing VCs, he also suggests that you demonstrate exactly how your technology -- or whichever product or service you make or provide -- will earn potential investors money.
Do your homework, get your ego in check and reveal your plan for long-term financial stability in clear yet concise detail. And, remember, no one wants to put skin in a game that smacks of hubris or, worse, isn’t profitable.For more of Canavan’s straightforward advice on how to attract venture capital, check out the short video above.