Raising money is about sales

urlRaising money sucks.  It doesn’t matter what series you are at it is just not something that is enjoyable.

I am invested in a few companies that are raising money right now.  They is no doubt that money will be a game changer but more important they are businesses that will succeed.  At what level?  Well that is always a crap shoot but they have each proven the model and understand how big they could each grow.  With that being said, it still is not easy to get cash.  You have to find someone who believes in the vision and actually is interested in that particular space.

I was on a call with one of the women I am invested in and we were discussing her first pitch.  I told her straight out that raising money is all about sales.  How can you connect with the person on the other side of the table.  How can you own the conversation?  How can you get across what needs to be said by answering their questions.  I suggested to think about the pitch like you are talking to the media.  Sometimes the questions are irrelevant but the information in and around the questions are relevant.   How do you answer that so the person asking the question gets the “aha”.

I told her a story that I thought was relevant.  When I was working an assistant buyer at Macy’s the guy who ran the division was a hard-ass.  Most of the buyers were women and they were all unhappy and miserable.  He was not exactly a warm and fuzzy person but someone who was gruff and had zero tolerance for stupidity.   Truth is,  I could appreciate where he was coming from.

I was working for someone who got promoted and then a new person came in who I adored.  She got promoted and I was left holding the bag.  All the financials for the season were due.  This was before computers.  The spread sheets were insanely long and by the time you finished working on them they had holes from erasure issues.

Keep in mind I was 22/23 years old.  I did all the preparations and went into the office of the division head.  He took a look at my spread sheets, barely looked at me and tossed them back in my face.  He said, these are not right, go back and do them again.  OK.  I went back to the office and reworked the numbers.  Then I returned to his office, hanging at his door until he acknowledged me with the financials.  He took a look at them and did the exact same thing to me that he did before.  This time I did not take the financials and walk out the door.  I looked at him and said I do not want to play this game.  We can go back and forth all day but if you don’t show me what you want I am never going to get it right.  Show me what to do and I will get it right and I can then move on to other things.  He looked up from his desk and told me to sit down.  He showed me what he was looking for.  After that he treated me totally different.  When he came to visit me after I got promoted he could not have been more proud of my accomplishments.  By pushing back I won his respect.  It was a total game changer.

Investors can be tough but they want to invest in someone who pushes back, who is so committed to their business that is oozes out of them and that they believe that you are the person who can execute on the vision.  Not everyone is a sales person but the reality is when you raise money you have to sell the dream.

Comments (Archived):

  1. awaldstein

    It does indeed suck.People who say otherwise are talking the talk, not walking the walk. Those who say it isn’t distracting have never done it.I personally and 3, no 4, of my accounts are doing it right now.I like to sell but this is not how I define fun.

    1. Donald E. Foss

      Fund raising is not fun, but I enjoy the pitching and Q&A process. It keeps me on my toes and makes me feel alive. The rejections are another story. One of my favorite Chris Dixon lines goes something like “If you’re a startup CEO and not getting rejected at least once a day, you’re not doing your job.”I think that if you are not proud of your pitch deck and don’t enjoy delivering it, then you shouldn’t be in the fund raising game. Selling is quite difficult if you don’t fully believe in what you’re selling.

      1. awaldstein

        The best deck is nothing compared to a great story with proof points.If you have both, all the better.Two things I know:-Whatever anyone says getting rejected and failing seriously suck. We do them but I don’t mythologize them as anything other than pain that we learn from.-Fundraising is indeed a litmus test for company success. If you can’t raise the money you probably (not definately) can sell your value to the market understanding that of course how you pitch to a VC and how you sell to a customer are not the same.

        1. Gotham Gal

          All pitches are a little different

          1. awaldstein

            YupI learned early on–in fact, defending my thesis in college–that when you get others engaged enough to ask questions, then you are doing your job as a sales person.Recently started to relook at some of Nancy Duartes work, like Resonate.I don’t agree with everything but she does understand well that selling like storytelling is a process of suspending disbelief.

        2. Donald E. Foss

          Best deck: you my friend are the marketing _man_, so you’re entirely correct that the kool aid needs to not only have great packaging, but also taste great and be less filling all at the same time.Rejection sucks, whether when pitching or any other point in your life. Failing is a bit different, providing that you could learn from it. If I learn something to make myself or our company better, then it the failure/mistake was probably worth the effort.I have 3 major mistakes to live with in my first 6 months here, and I learned a lot from each–the hard way. I still don’t enjoy the results of my mistakes, but such is the path to wisdom.

      2. Gotham Gal

        You have to be all consumed in your own kool aid

  2. Tom Evslin

    Am also in the middle of fund raising and also agree. Some corollaries because fund raising is selling:1. not everyone is a prospect. Qualify the leads and move on when one doesn’t qualify.It is almost impossible to get a fund or person to move out of their comfort zone for investing.2. the prospect wants to know what’s in it for him/her. Yes, you have to explain how the company will use the money but the prospect’s lens will be return to him/her and the possible exit strategy to achieve that.3. Don’t forget the ask!Good luck.

    1. Gotham Gal

      Great advice!

    2. Cynthia Schames

      Great point Tom. I would add, be working harder to disqualify the prospect than to qualify them in. Just because an investor has money to invest doesn’t mean they are the right investor for your company, your sector. Maybe your personalities just don’t mesh. At early stage, this is pretty important. I look back on our first investor and am absolutely thrilled that I chose well (and I believe he did too)…but that’s not always the case. Too many entrepreneurs find themselves between a rock and a hard place and take the dumb money.

  3. CarolJThayer

    You have to find someone who believes in the vision and actually is interested in that particular space. http://0rz.tw/YAAeL

  4. William Mougayar

    Yes, and I would add a key component: “Sell with credibility.”Especially if you’re interacting for the first time with an investor that doesn’t know you yet, the credibility of your pitch will influence the opinion they will form about you.

    1. Gotham Gal

      yes…be authentic. You are in front of an investor because something interested them. Ask the question. I am happy to be here but I am curious what is it about my business that got you excited enough to have me come in and hear about it.

      1. pointsnfigures

        Absolutely detest liars. Usually I can spot them, but I have been played in my investing career. (or let myself be played). Really angers me with myself.

  5. pointsnfigures

    Yup. I don’t mind when an entrepreneur pushes back at all-as long as they can back it up with fact. On the investor side, sometimes you have to expand your definition of what “sales” is. For example, in a social media startup, it might not be about signups, but engagement.

  6. Lisa Abeyta

    Every one of our investors have pushed back, and I’m glad. If they didn’t have doubts or questions, I would be worried that they didn’t actually understand our vision and might be unhappy with things if their vision differs significantly from ours. Phenomenal advice and great example.

  7. David Ehrenberg

    I could not agree more! And part of selling is connecting the dots for potential investors on how you will use their money to execute identifiable, discrete business goals.

  8. Rohan

    I know selling gets a bad rep.. but we are selling ALL the time. In fact, a large percentage of our day is spent selling – convincing people, presenting to people, moving people – all of which comes down to being able to sell.You inspired a post – http://alearningaday.com/20… 🙂

  9. AG

    A lot of things in life are about sales. Awesome story about you and the manager.

  10. LE

    We can go back and forth all day but if you don’t show me what you want I am never going to get it right.”show me what you want”.Great advice that also applies to relationships as well. They call it “ask for what you want”.The ability to sell is super important obviously and fun as well.I had a meeting with my mom and a financial advisor a few weeks ago. The guy (in his early 40’s and head of this small firm) totally spun my mom’s 86 year old head in circles.She had no idea what he was talking about (he was quoting % fees that he charges for stock vs. bond investment or when in money markets).But he also mentioned that it “averages out to .75%”.So I said to my confused mom “mom, you have $x which is is going to invest for you and take care of.His services are going to cost you about $x per year so the decision you have to make is is that worth it or not”? (Something like that I don’t remember the exact words).She immediately understood and decided to go with this advisor because the value of his services were simplified to her level of thinking. After the meeting I thought “this guy would be more successful if he simply understood how to pitch someone like my mom” (which he actually must have done frequently).