Ghosting -- never hearing back from the other side -- can be as frustrating from investors as it is from dates. Here are some possible reasons why it's happening and how you can prevent it.
When fundraising, founders often sound like disgruntled singles. They invest time attending meeting after meeting trying to raise funds or spread awareness, usually culminating in disappointing results. The worst is situation is when a founder is "ghosted" by an investor after what seemed like a great meeting. As in the dating world, investors will simply cease communication in an attempt to avoid an uncomfortable situation.
Why are founders getting ghosted by investors? Was it something that was said? Something they did or didn't do?
There are numerous reasons why an investor would back out of an agreement and the most common are listed below. Here are my tips for managing your fundraising process to avoid frustrating situations.
“Tinderize” your pitch
Investors don’t have time for long, drawn out sagas. Instead, they want to get an immediate impression of you and your organization, then swipe right or left in an instant. Make sure you have a stellar elevator pitch that entices potential investors, and you will land that “first date” or first meeting.
Have a great “dating profile”
Just like on Match or OkCupid, an investor will want to scrutinize your profile before a “date." You want to make sure you stand out from the competition. You should have a great teaser deck, one pager or an executive summary ready to go. Also, don’t forget to update your LinkedIn profile because that is usually the first place they will go to research you and your organization.
Going "all the way" on the first date?
Don’t overload potential investors with too much data, facts and figures. Don’t have slides that are oozing with financial projections and bits and bytes of your technology. Keep it simple, clear and understandable so you can show your expertise and ability in your industry. Give them the opportunity to ask to see more and you might be headed for the desired "second date", which can take the form of a follow-up meeting, an introduction to their partners, working with a technical expert or some other due diligence piece of the process.
You’ve been ghosted, what now?
Nothing is worse than getting ghosted after having an exciting meeting with a potential investor. Don't take it personally and try not to beat yourself up. Remember, it's not easy for investors to turn enthusiastic people away, especially if they would like to work with you in the future. Don’t be afraid to follow up with a promising lead. Elizabeth Yin, general partner at Hustle Fund, suggests following up with investors when you say you will. If you haven't heard from someone in three to four days, reach out to them again. If they still haven't gotten back to you, follow up with them in another three to four days. One helpful tip is to always include a call to action so they know what it is you want them to do.
It’s hard to not get jaded after experiencing missed opportunities and rejection, but keep the positivity going. Enter your next meeting with a smile, a great attitude, zest, zeal and never show desperation. It’s a turn off for investors just like it is for dates.
Don’t settle for a one night stand
You may feel like you should just “settle” for the first proposal you get. Don’t enter a partnership too quickly. Make sure the investor is the right match for you, which is the one that will take you to the next level. Money in-hand isn’t always enough. Does the investor have the ability to continue funding your cause? Will they stand by you in both good times and bad? Can they help you make important decisions? Remember, who you partner with will have a strong impact on who your future investors might be.
Investments often last longer than a marriage, and investors want to partner with someone who is great to work through the good and bad times. Show potential investors yourself at your best and think of the entire process as a numbers game. Only so many "dates" – or meetings – until you meet the right partner for you.