You’ve made your pitch, fielded questions and nervously exited the room.
So, what are the investors talking about on the other side of the door? Did you make a good enough impression to sell your company? These are the answers founders would love to know and will likely never find out.
Until now.
During the ‘After You Leave the Room’ panel at Boulder Startup Week, investors and founders alike provided insight into the nerve-wracking post pitch conversation.
The panel discussion was led by Rockies Venture Club Director Barbara Bauer and included Rockies Impact Fund Managing Director Dave Harris, Good Buy Gear CEO and co-founder Kristen Langenfeld and P2Binvestor CEO and co-founder Krista Morgan.
So, what are investors saying behind that door?
“Nothing but positives,” Harris joked. “I intentionally ask people to start with the positives. What did you like about the opportunity? What stood out as a green flag? Then, almost organically, it will morph into the concerns and red flags that pop up. But, we really try to talk about both things.”
Naturally, investors are driven to focus on the red flags and shortcomings in the pitches they hear.
Langenfeld and Morgan said it was important to address those concerns in your pitch, so that the conversation after you leave the room is focused on your strengths.
“It’s better if you can ask them what the red flags are or know yourself what the red flags are,” Langenfeld said. “I always ask for advice, then you really hear their hesitations and sometimes you get a chance to change their mind.”
Morgan said understanding and bringing forward your shortcomings is crucial to any pitch.
“When you leave the room, you’ve already told them what to talk about. You want investors to be focused on the things you’ve already thought about and not a tangent,” she said.
Unfortunately, investor conversations can become tangents, turning down roads that aren’t relevant to the business at hand. Bauer said it's key for investors to keep that focus and steer the conversation back on track.
“As investors listening to pitches, we have a responsibility to ensure that the conversation after the entrepreneurs leave the room is actually on point to what that venture is trying to do and not literally devolve into things that are personal preferences,” she said.
In addition to keeping focus, Harris said investors need to shed biases before they open discussion, especially when eyeing deals in markets where they’ve had past deals go bad.
“Trying to separate those experiences from this opportunity is important. You can use it to inform a decision, but not kill a deal because you don’t like a particular model or space,” he said.
While it can be difficult to predict the conversation behind closed doors, Morgan said it’s vital to understand who you’re pitching to and altering your presentation to fit that group.
“Fundraising is a sale process and we all know the key to sales is understanding who you’re selling to and putting yourself in their mindset,” she said. “You adjust accordingly.”
