Max here. I’ve missed you guys! Eagle-eyed readers will notice that I missed my last turn at emailing y’all, during the week of 4/11. I was MIA due to a personal emergency, but am back and better than ever, and excited to riding the Oversubscribed train once again.
We’ve got a mix of tweets and articles to share with you this week, so let’s get going.
It’s not only hurdle, but a major hurdle I see in fundraising (as a VC w/50% diverse teams) is relationship diverse founders have w/projections. SWM’s face less scrutiny, so they’re more willing to share pie in the sky possibility. For better or worse that’s what VCs look for.— Charlie O'Donnell (@ceonyc) March 19, 2019
This thread from Charlie O’Donnell of Brooklyn Bridge Ventures—a man whose initials are, incredibly, “CEO”—has some important insights about the extra challenges founders from underrepresented groups face. His advice, though, is valuable for everyone:
When you’re pitching an investor, the numbers in your projections shouldn’t be too realistic. They need to be grounded in reality, but they should be a best-case scenario, not numbers you’re totally confident you can hit.
Note, though, that this advice only applies when you’re pitching. When talking to your current investors, whether as part of your board or more informally, you’ll lose credibility if you repeatedly present unrealistic numbers.
Advice to entrepreneurs:— farbood (@farbood) March 26, 2019
Don’t ‘pitch’ investors
That’s being thirsty.
Tell them who you are, how you think, what you’ve done so far, what you’re planning to do how the market looks. Teach them. You should know it better than they do.
Even though his initials don’t spell anything cool, I really enjoyed this thread from Coinmine founder Farbood Nivi. As we write in our book, the best investor meetings don’t feel like pitching—they feel like conversations, with substantive back-and-forth.
Paradoxically, it’s usually a bad sign if you make it through your entire prepared pitch, because it often means the investor isn’t very engaged. You actually want them to be interrupting you with questions, or even pushback, especially if you have good responses to the pushback.
Of course, you can’t always control how engaged the investor you’re talking to is. But one thing you can do is control your tone. When you’re with an investor, your voice and body language should be conversational. As much as possible, act like you’re explaining your startup to a friend, not “pitching” your company to a judge.
Some bonus reading on mentorship
While they’re not explicitly fundraising-related, I really enjoyed these two recent pieces on mentorship: Finding a Mentor from Basecamp (née 37signals) and How to Make Connections That Count from First Round Review. They were a great one-two punch on the theme and I found them to be quite helpful, especially as someone who’s often struggled with the idea of mentorship.
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