In the high-pressure boardroom where millions hang in the balance, there are some things just better left unsaid. Here’s my 5 favorite phrases that no investor wants to hear… and how to spin them into a chance at a check:
- “This business plan is just a rough draft.” This is like telling your teacher that you forgot to do your homework. If you don’t have a business plan, you aren’t ready to talk to professional investors. It doesn’t have to be War and Peace, but your business plan should be well researched and describe the marketplace problem that you solve. Say this instead: We’ve mapped out our market and solution, but we are willing to pivot based on user feedback…then finish your business plan.
- “We don’t need the money.” The last person to say this successfully was Mark Zuckerberg. You are not Mark Zuckerberg. If you don’t need their money, why are you talking to investors? Investors want to put their money to work – they need you to need it. Say this instead: “We’re prepared to scale based on your investment.
- “Billion.” If you invoke the “B” word, you better have some really good research to prove it. And it better be extremely relevant to your core business. If it isn’t, just drop it. Say this instead: Nothing. Instead, find a believable number that is meaningful to your actual market.
- “We don’t have any competition.” No list of startup hazards is complete without this gem. When you utter this, an investor hears, “we don’t understand the market and we don’t know how to do a web search for similar companies.” The trick is not to be entirely unique, but to be able to compare yourself to others. There are plenty of ways to change the market and to beat competitors, but if you don’t even acknowledge them you are simply asking for trouble. Say this instead: “We’re aware of several ways that customers are solving this problem now, but none of them are as cheap/easy/fast as we are.”
- “Everyone we show it to loves it.” Of course they do – when you are showing it to them. People are not going to call your baby ugly to your face, but an investor wants to know that you’ve met some nay-sayers and know how to handle objections. Nothing sells to every buyer every time. Prove that you’ve done some real market research. Say this instead: “We’re using the 4-Steps to the Epiphanymethodology, and we’re getting in front of as many potential users as we can.”
Think of entering an investor’s office like going on a foreign vacation. You don’t have to be completely fluent in his language, but you ought to learn a few phrases and understand enough culture to avoid giving offense. If you can curb your enthusiasm enough to avoid saying the wrong thing, it may just keep you out of trouble long enough to close the deal.
Oh, and then, when the money is in the bank, you can say whatever you want!
Dedicated to your (Fully Financed) profits,
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