I was talking with a startup founder a couple weeks ago and I asked him, “as you were going through your journey for funding, what was the most important thing you learned?” I expected an answer that was technical in nature, about the pitch, the cap table, which investors like which type of tech, etc. Instead, he told me “Know your truths.”
We talked more about just what he meant, and he confided that when his startup was seeking funding he heard “no” a lot. No surprise there, since most companies seeking investment from venture capitalists will hear similar bad news and, in fact, will never receive funding. But his insight was that, regardless of those early results – the early negative replies – do not waiver from what you know to be true about your market and your approach to it.
You Know You’re Right
Startup founders, including those who never actually obtain VC funding or the big exit, are by nature a bold lot. And intelligent. And a little crazy (but in a good way). There’s no one approach or persona that fits the role entirely – you could be a zen master or an egomaniac (or both) and either of those attributes could help drive success. One thing you will always have to be, however, is convinced that your idea is right and what you’re doing is right.
That’s what my founder friend meant. He explained that the delivery approach he was targeting was big (huge in fact), and it turned out he was right. He knew the problem he was trying to solve was very real, and cost companies a lot of time and money. And he knew the market segment that needed his services most. And he was determined to stay the course according to those principles.
Calling Dr. Freud
That may sound fairly easy – but when you hear “no” often enough, it becomes difficult. So difficult, in fact, that entire careers have been built by acting as a pseudo-psychologist for founders – no less a luminary than Chris Sacca leveraged a law degree and no discernible technology talent or specific vision to become one of the most successful VCs ever. His genius was in understanding how to use the law effectively, for certain. But the “soft skills” he possessed and put to use to counsel founders when they were at their lowest point were what made him special as an investor. He believed. And when he did, he made his founders believe too. He was able to do this even before he had any discernible “street cred” or reputation. And when those founders believed, they both knew and stuck to their truths. They didn’t veer away despite the rejection.
Just Say No
This particular founder also explained to me that, despite his conviction that he was right, he became so wrapped up in “the game” of seeking funding that it took his attention away from growing the business. And he heard “no” enough that he started modifying his executive summary heavily for each investor he pitched, basically agonizing over the summary for each pitch and taking yet more time away from the product he was building. And this is where he got away from those “truths” that he told me were so important to know and remember.
And he regrets that – now, he would undoubtedly reject the notion of such specialized pitches. Of course, that’s another trait that makes a great founder – making mistakes, recognizing and acknowledging them, and learning from them. This type of self awareness is among the softest of the “soft skills,” but no less important despite that.
Obviously, it makes sense to research the investors you want to work with and pitch. Equally obvious is that the pitch can change a bit for each of those investors. But if what you’re doing is “right” (and you know it is), most of what you say each time through the pitch is going to be the same. After all, you’re just going to be repeating your truths. And if the investor chooses not to believe the truth? That’s his problem.
