Investors Want Authenticity More Than Promise

January 25, 2023
2 min read
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Today, a founder named Matt (edited for anonymity) dropped by my office to say hi.

I left our first meeting a week ago with a positive bias towards supporting his vision and potentially making an investment.  However, I also left with  skepticism that Matt was holding something back, that the story had been edited and overly polished.  The pitch, which was textbook, was far too product and progress oriented given how young the company was.  It was impersonal.

And so, in strolls Matt a week later to exchange pleasantries and share some little wins from the week.  I stopped him, “Matt, that pitch was awkward, in spite of your company’s progress.  Am I missing something?”

And so it comes out – how Matt had found a mentor to support these early days, and had been advised to stay on message with investors, keep with the story, and pre-package the opportunity to match ‘what investors want’.

Fast forward an hour later, and I’m left in awe.  Multiple team members working for nothing, no formal contracts, no promise of future equity or compensation.  All of them working on their trust in Matt and relying on his integrity to reward their early sacrifices.  Not to mention more progress (revenue) and better visibility on new opportunities beyond the initial hypotheses.

Matt’s pitch had failed to parallel his values or his character, and he instead told me what he thought I wanted to hear.  It fell flat.  Based on my own experience, investors want authenticity more than promise, and integrity more than progress. 

When practicing your pitch, make sure a little bit of You, your Self, comes out with the story.  If it doesn’t fit, change the story to match You as a person.

And if you’re getting coached by someone who has raised capital themselves, make sure their experience is recent and relevant.  If you’re raising seed round, find an entrepreneur who raised in 2011 or an angel investor with experience.  If you’re raising an A round, find a founder who’s been through it, or seek mentorship from an associate/principal at a venture firm.

At least with angels, be honest, share more than you think you should, and stay true to your Self.  You’ll raise more money faster, and the relationship with your angels will grow stronger and more valuable as a result.

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