Meet Investors Where They Are
Recently, I have found myself turning to a frequent sentiment when talking to founders about fundraising: meet investors where they are.
What do I mean by that? I have found that the path of least resistance when it comes to pitching is to meet investors where their interests lie. This could be related to their sector focus – for example, someone with a history of investing in healthcare – but, what I see more often is whether it aligns with the ebb and flow of the market. For lack of a better term, what is “hot” at the moment.
From my own experience pitching Andrena, when I’m educating a potential investor on not only our business but our industry too, the probability of success dramatically decreases. Why is that?
First, investors have an opportunity cost with their time. As one investor who will remain anonymous told me as they passed on Andrena’s Seed round in 2019: “The work we’d want to do on understanding the capabilities of the underlying tech approach isn’t something we can prioritize at the moment so rather than take up your time unnecessarily, we’ll hold off.” Put another way, the marginal unit of time learning the landscape will be better spent assessing other investment opportunities in areas around which they’re already knowledgeable.
Second, investors frequently care about appearances, specifically amongst their peers. When the marketing is zigging and a big investment zags, there can be some eyebrow raising. When everyone else is investing in the next large language model, vertical SaaS can lose its luster.
Third, I hate to say it, but I think that some investors can be lazy. This falls on the founder as well, but if a pitch does not grab the investor’s attention in the first five minutes, it might as well be dead on arrival. Trying to educate is an uphill battle, but the key is to relate what you are building to something already in the investor’s orbit. Speak their language.
Of course, I’m not suggesting every company needs, for example, an AI overlay in their pitch.
Rather, with any pitch, I think it is important to put yourselves in the shoes of the investor. What are they excited about today? What have they spent their time researching and exploring? What markets are they curious about, not just from their investment history but also what they’re saying on panels or mentioning in blogs and on social media?
If you as an entrepreneur can demonstrate that you have tuned into the investor’s world and can frame your pitch in their language, at least you’ll be able to grab their attention from the outset rather than having to waste time on bringing them into your world.