Joakim Achrén — July 14, 2023
In May and June of 2023, I released two pitching session videos of founders pitching me their companies and then having a feedback session about their pitch.
I’ve often talked about the interactions between founders and investors, especially the most essential part of the pitch meeting: the conversation after the pitch deck presentation.
Over the past four years as an investor, I’ve had hundreds of pitch meetings with founders. Here are the things that I picked up from the meetings that aren’t necessarily related to what the company is doing. Instead, to reflect on the way the founder presents, their personality, and how they approach the founder-investor relationship. All are coming back to understanding the founder.
Tell me, and I forget, teach me and I may remember, involve me, and I learn.— Benjamin Franklin
From my perspective, when sharing feedback with a founder, I’m attempting to clarify to the founder why certain things in the pitch are resonating and others are not. All investors want founders to succeed, and sharing feedback from my knowledge bank will help them along their journey.
Often, the pitch can turn into a position of the founder becomes defensive when receiving feedback. They might attempt to counter the argument that the investor is making, often leading down a path of “he said, she said.” Don’t get me wrong; I like to be proven wrong about anyone, but founders aren’t often prepared to counter my arguments. It would be great to say, “I hear what you are saying, and I need to come back to you later with my response.”
When facing adversaries from an investor in a pitch meeting, asking why they think so can lead to new and helpful insights. To get to the bottom of things is what a founder should strive for. To uncover insights.
From my twenty years in startups, out of which sixteen as a founder and four as an investor, I’ve learned 100X more as an investor on the topic of what being venture-backable means. As a founder, you are often siloed into your own company, and you aren’t interacting, asking questions, or being curious about all the details that matter when raising funding.
When spending time with a VC, be curious and ask them how your business could be venture-backable: not only about how the market should develop but do you need specific talent and do you as a founder need to develop somehow personally.
“The art of conversation lies in listening.”— Malcolm Forbes
The reward of being curious is that things become more fruitful every step of the way. Once you are genuinely curious about the investor’s perspective, you can start being more of an active listener.
The benefits of active listening are two-fold:
1) You gain knowledge to develop yourself, which you can apply to work at your startup.
2) You gain the trust of the investor, who will develop a belief that this founder is capable of developing.
Let’s tackle the first point first. When you are genuinely listening, you gain more intel which you can use to connect the dots. Your comprehension of what a successful startup looks like develops. Practicing active listening enables you to grasp information more accurately and thoroughly.
The second point is the most material of becoming successful at fundraising, especially at the early stage where there are no KPIs to look at, no revenue, and often no users. It’s only the founders, which is what the investor is evaluating. Their ability to take capital and then start deploying it to build something that, in 12-18 months, enables them to raise the next round.
Are you just going after the money?
In my four years as an investor, I’ve often seen founders keen to move quickly, build fast, and even break things along the way. This is great; you want that kind of attitude to win in the challenging startup game.
Where speed plays to the detriment is not picking partners wisely. You might be a founder who indexes on getting the best terms: you pick your lead investor based on the best terms. This used to be a beneficial strategy, but in the 2020s, thousands of VC firms are focused on verticals, like gaming. You want to spend time finding the right partner for yourself who can give you guidance, insights, and mentorship in your industry.
Besides the industry guidance, you want an investor who is very knowledgeable about VC startups. They should be good at telling you all the associated risks, navigating them, being a founder, and maximizing the chances of raising the next round. And how to run a startup.
Don’t speed-run your way to capital. Take the time to listen to investors and get to know them. Then pick the one who is the right partner for you.