In that seven seconds, I got Mubadala's attention
You might think it’s easy to raise money, but the reality is it’s really, really hard to raise money.
As a investor in the UAE, you are constantly meeting with founders pitching their company to you. For every 100 face to face meetings you take with a founder, you might invest in one company.
The most common reason an investor doesn’t invest is likely because the pitch is really bad or just mediocre. Let’s say that 80% of what you see.
So the 20% of the founders that are good or great really stand out. It’s like a breath of fresh air when you meet a great founder.
Here are the things I see great Founders do that good, mediocre, and bad Founders don’t do:
A. Great Founder get to the point.
You have such a short time to hook your audience, maybe seven seconds or less. In that seven seconds, a great Founder is able to tell investors everything they need to know, so they can get excited about investing in their company.
That sounds like a magic trick, doesn’t it? But it’s not. A great Founder will explain what their company does, why they are better than the competition, and how big the opportunity is in seven seconds or less. Now the Founder has investors hooked.
B. Great Founders command the room.
I’m not saying you need to be Steve Jobs. And I’m not saying you need to be some extroverted version of yourself that you’re not. I am saying that great Founders (introverts and extroverts) because of their knowledge and communication skills, command an investor’s attention.
C. Great Founders know their numbers and then some.
I was speaking with a Founder yesterday about his company. He was preparing to raise his next round of funding.
I asked “Mohammed” how much money he wanted to raise. Mohammed said, “I’m not sure. Maybe $3M to $7M.”
Mohammed’s not a great Founder, yet. Knowing exactly how much money you need to raise is part of being a great Founder.
In fact, let me go one step further. You should know how much money you’ll need not just for this round of funding, but how much you’ll need for the life of the company.
Yeah, I know that this is your best estimate based on your knowledge today. That’s okay. Investors understand you don’t have a crystal ball. Here are some more numbers you should know:
What is your monthly revenue?
What is your estimated revenue for the year?
What is your break even revenue?
What is your current burn rate?
When will you hit cash flow break even?
D. Great Founders have a back up slide deck.
Let’s say you’re having a great meeting with a prospective investor. Then the investor asks you a question that isn’t answered in your pitch.
You don’t know the answer, so you say, “I’ll have to get back to you.” Did you hear that sound? It’s the sound of momentum leaving the room.
It’s so much better if you’re prepared for all the contingencies. And one of the best ways to do this is with a backup slide deck.
A back up slide deck is for information that goes beyond your normal pitch. A back slide deck is also for information that doesn’t fit in your deck.
Start preparing your backup deck today. You’ll naturally start adding information to your backup slides as you interact more with investors.
E. Great Founders are clear communicators.
There are a lot of things that make you a great Founder. When it comes to pitching, it’s your ability to a clear communicator.
Great Founders don’t ramble. Great Founders don’t hide from the facts. Great Founders communicate clearly about their company.
For example, great Founders explain clearly how they are different than their competition. Not only that, great Founders know their competitors inside and out.
They aren’t afraid to say who the competition are and what’s good about them. That’s why great Founders command the room (Point B above).
F. Great Founders are fanatical about their companies.
Even if the Founder is an introvert, you can see it when you meet a great Founder. The “it” that I’m talking about is fanaticism about their companies.
You can’t fake fanaticism. You are either a fanatic about your company or you aren’t. But I have a question for you if you aren’t fanatical about your company.
How can you expect anyone you hire to be fanatical if you aren’t? The answer is you can’t expect to hire fanatics if you’re not fanatical about your company.
Fanaticism is the secret ingredient that gives you and your team the ability to get through the tough times. And there will be tough time ahead.
G. Great Founders rehearse; and it shows.
There’s nothing worse than watching a Founder that’s given a one hour time period to pitch run out of time. There’s just no excuse for that. Ever.
Great Founders never run out of time because great Founders rehearse their pitch over and over again. Let’s say you have a one hour meeting with an investor, but the investor only has 30 minutes. What will you do?
A great Founder already knows how to handle this event. The slide deck is seamlessly reduced to fit the new constraint without feeling rushed.
The reason the Founder doesn’t feel rushed is due to all the practice. If you’re just starting out, rehearse and, literally, use a stopwatch to time your presentation.
And while you’re at it, have your executive team rehearse their bios if they are going to come with you to meet investors. Keep their bios to one minute or less and keep yours to two minutes or less. Oh, one more thing. Great Founders never bring someone to pitch that isn’t going to add value.