Welcome to the Dreamit Dose. In the next five minutes, we're going to talk about
the biggest mistake most startups make at the end of an investor pitch,
how to find out what they're really thinking,
and the key questions you should be asking that most people aren't.
Let's dive in.
So, what's the biggest mistake we see at the end of most startups
when they're pitching investors or pitching us?
The biggest mistake they make, is they don't know the key question to ask.
They finish their deck or PowerPoint or Keynote or Google slides.
Yay, Google slides, nothing better to use than Google slides for doing these types of decks.
But anyway.
When they come to the end of it,
they get to their last slide and they say so I'm happy to take any questions.
Oh that's nice that you're so happy to take any questions.
But there's a question you should be asking
The question you should be asking is something to the effect of,
so what I'd love to know is this the type of company
that you'd want to make an investment in?
Does this meet the criteria of what you're looking for?
That's called a trial close.
For those of you that have done B2B sales or done sales in their backgrounds,
you know that idea of a trial close. Right.
You ask for the business. You try to close the business
and find out the objections to sale that you get when you try to close that.
Let's come out of startup land for a minute and just look at this in a different world.
Go over to the Toyota dealer this weekend and go try to buy a Sienna minivan.
When you're there, that salesperson is going to be all over you.
They're going to be asking you tons of questions.
They're gonna ask you, what do you own today?
What are you thinking of buying? Do you have the financing?
What do you need?
And they're going to kind of come around to, so what do I need to do
to get you in this Toyota minivan, right now, today?
And you're going to sit there and say things like, you know what.
I'm not sure if my dog would really like it in the back.
I have a big German shepherd. Well bring your dog along.
Let's see what they think. I'm not sure if my partner is really going to like it.
Well bring the Toyota minivan home for a couple hours.
We're fine for you to do that.
They're trying to find out the objections to sale.
What do they need to do to close that business?
When you are raising money for a startup, you're doing exactly the same thing.
This is a sales process.
You're selling equity in your company.
So in this time, you're not selling your product, you're selling equity.
So ask that question.
What do you need to see to make an investment in a company like us?
The great things you're going to get back from that are their objections to sale.
They might say things like well really it's not in my wheelhouse.
Commonly they'll say, you know what, you're a little too early for us.
The classic VC. You're too early.
Cool. So what you want to do when you get that objection to sale
when you ask Is this the type of thing you'd make an investment in.
Your comeback to that is, great, appreciate that.
What would you need to see? What are the metrics?
How many customers, what's the revenue, do you need to see us doing
a hundred thousand dollars a month or a million dollar ARR?
Over two million dollar? Or is it our CAC to LTV ratio?
What's the number that you need to see?
And then as an entrepreneur, if you're brave enough and smart enough,
you're going to come back to that investor and say look if that's your objection.
So if I come back to you six months from now and I can show you that we're
rolling at a two hundred thousand or three hundred thousand dollar MRR,
monthly recurring revenue,
and we're doing just over two to three million dollars.
Would you write that check? Would you make an investment?
And the great thing, and we so rarely see entrepreneurs do this.
The great thing is that the investor was almost like game on. I'd make that bet.
You come back to me six months from now. You show me that kind of traction.
I'll write that check.
That's the kind of thing you want to find out.
So at the end of an investor meeting, the question you are asking and it's really simple.
What I'd like to know is, is this the type of company,
is this the type of stage, that you'd write a check for?
Do that trial close.
Find out what the investor says. Find out what's going through their mind
and figure out what you're going to need to do to get that ball over the
goal line which is to close your next round.
That's it. Really really simple.
That's the question you need to ask. What do I need to show you?
What do you need to see to make an investment in a company like us?
That's your Dreamit Dose in less than five minutes.
Look forward to seeing your questions in the comments section.
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Look forward to seeing you next time. Thanks.