The startup founder’s dream is a successful business. Between the reality of today and the dream of tomorrow is the crocodile-infested waters of investor funding.
Nothing is quite so painful as investor rejection. When you pitch, you already feel small because you’re asking for money. Then when you’re rejected (not if but when, since every founder will face some rejection), it feels like a double-whammy.
I’ve coached more startups than I can count during my career. There’s a formula to pitching that I share with founders, but the formula is not enough.
The biggest challenge we face when pitching is the power dynamic between founder and investor. This power dynamic is more influential than the pitch itself.
Here are three paths to stand in your power with investors. These also work for executive and client meetings.
1. Communicate the BIG PICTURE
Harvard did a study in 2021 showing that pitches using more abstract language are more likely to get funded. This study was born out of a previous study from UC San Diego showing that powerful leaders speak more abstractly than powerless ones.
Don’t focus so much on the nitty-gritty details of your product (the “MIPS and Megahertz” as Steve Jobs called them), focus on the big picture. How does your product strategically fit into the market? How do your benefits provide business value to the customer, not just technical value?
In addition, always include a vision in your pitch. In my research on successful TechCrunch Disrupt pitches, the large majority of winners included a vision either at the beginning or the end of their pitch (i.e., how will the world change as a result of your product?).
When you communicate the big picture, you will feel more powerful. And when your words are more abstract, investors not only see more value in your startup, they see you as a more powerful and capable leader.
2. Confidence shows up as CURIOSITY
Investors don’t invest in needy people. I cringe when a founder says, “we need X dollars to build the business.” You already disqualify yourself from being a good investment with your need.
There are simple tactics to overcome showing neediness (e.g., saying “with X dollars, we can scale our growth.”). But if you feel needy on the inside, you will leak your neediness out in other ways.
To overcome the feeling of neediness, which is why you feel small and uncomfortable when you pitch, flip the script.
Enter the pitch with the goal that you are choosing a partner to work with, not going in for an interview.
Twenty minutes before you pitch, decide on what qualities you seek in an ideal investor. Set your goal what you’re looking for. When you do this, your mind enters “curiosity mode.”
Instead of using the pitch to prove yourself (which is the ultimate low-power behavior), use the pitch to promote the business opportunity, then ask investors questions to explore whether they will be a good fit for helping you capture this opportunity. What is their industry experience, how can they contribute to your growth? It’s not about judgment, it’s about curiosity and learning.
(FYI – you see this in Shark Tank all the time. Investors explain how working with them will benefit the startups they want to invest in. In a successful pitch, they sell themselves just as you sell yourself.)
When you balance pitching with goal-directed inquiry, you balance out the power dynamic. This mindset shift will center you so you feel more confident, and investors will see you as a more worthy investment.
3. Leverage NON-REACTIVITY
Jumpy founders make jumpy investors. Research found that when someone stands in their power, they are less likely to react to others. But often through the desire to please, founders react to their audiences.
When investors ask questions, if you impulsively respond with an answer, you communicate that you’ve either not through your response (negative signal), you’re trying to impress the investor (negative signal), or you’re defensive (negative signal).
It’s important to pause before responding. Pausing shows thoughtful consideration, demonstrating you are internally-anchored.
Defensiveness is perhaps where founders get caught the most. In the attempt to protect their startup’s image, a founder will become defensive or dismiss criticism. This is the worst reaction a founder can have.
There’s nothing wrong with being imperfect. In fact, everything is imperfect, so no use pretending. A strong leader can lead an imperfect company to success. But a weak leader cannot. And we show strength or weakness by whether we react to criticism.
A powerful leader will pause to assess the validity of the criticism, and then respond thoughtfully. A weak leader will reflexively dodge criticism.
There is no value in not pausing.
Powerful founders build successful companies. When you communicate the big picture, maintain a mindset of curiosity, and leverage non-reactivity through thoughtful pauses, you will be seen as a founder worthy of investment.