Pitching – What do investors look for
Anda Gansca – Pitching – What do investors look for before they invest in a startup.
Pitching is a very interesting process, and again there’s a spectrum of people who just wing it, and people who over-prepare and over-Powerpoint and over-everything. Obviously, as with all things, the happy result is in the middle. That’s what I discovered. I did both, and none of the two extremes really worked for me. But, there’s a few things you need to know, especially as a woman.
First of all, if you’re starting the company, and you’re not in beauty, fashion, or really any other of the more “women-related” fields, in which the end user is a woman, investors are going to assume that you’re building the company for women. That’s because investors are pattern-matchers, and you’ll hear this a lot. What investors do to be successful at their job is look at industry trends, look at previous successful entrepreneurs and previous successful processes and companies and try to find those patterns in you, when you pitch to them. For me and my cofounder, both women, it was interesting because everyone was kind of puzzled that we weren’t working on a woman-related company.
I remember this one time, we were pitching really hard to an investor, and I think it had been four meetings, and we were one hour into this meeting and we were pitching this consumer data company, essentially, that’s more data-driven than anything else. And he says, “You know, you should just try to become a social mentor for gals.” And we were like, “What? What are you talking about? We’re pitching this revolution to you, and you want us to be a social mentor for gals. Why?” And to this day, when I talk to people, and I’m like “Oh, we started this company called ‘Notch,’” they’re like, “Oh, is it a fashion startup?” And so, there’s nothing wrong with women doing fashion startups, but there’s definitely, I wouldn’t say necessarily say a bias, but an expectation for women to do that. So that’s something that you need to know and pre-phase conversations with, maybe in a funny way. Like, “Oh, you know, I’m the woman who’s not doing the fashion startup,” or something along those lines. So that’s one thing.
The second thing is, all insecurities, and all those sides of you in which you feel like you need to get reassured, those all need to go away. Because pitching is all about being okay with other people being aggressive, and trying to poke, to get your most vulnerable spots, both of you as company, and of you as human being. I’ve gone through a lot of meetings where there would be just really awkward pauses, and a lot of silence and staring. I was like, “what is going on?” After a very difficult question, and me answering the question, a lot of awkward silence. And that’s just an example of a potential test that an investor might be running on you. There’s a lot of different types of tests.
Ultimately, I guess the real wisdom is that investors are human beings. They’re people just like you. So you should search for every possible opportunity, not to click with them as company and investor, but to click with them as people. All these networking events, and parties into one – they’re only as good as your depth of the connection you make of them. It’s really not about passing a business card or about pitching for ten seconds in front of, I don’t know, Vinod Khosla or in front of someone from Great Arc. It’s really not about that. It’s about going to a conference in Vegas and talking to an investor on the couch about your life and about how you grew up as a kid in Armenia, which is what happened to me, and then having that conversation be the driver of a later investment from that fund into the company. It’s really what happened, and it’s really what happens in general here. So, I would definitely encourage all entrepreneurs to do that.