GAN Ventures has invested in about 20 companies and, in 2019, we’ll invest in 20 more. That means we’re talking with a lot of startups and, when I think about it, all of our investments seem to have some core things in common. It would be easy to simply say that we choose to invest in founders that we trust, but I thought I’d give you more specific insights into how founders have built that trust with us. Maybe it will help you on your next fundraising call.
Show Up on Time
I only have a few touchpoints with potential investments before we write that first check. So while I’m not reading into every second of every interaction, I do believe that being late to a call or meeting is a direct reflection of bigger issues going on with that person’s company or life. I know that if you’re in a conversation with another investor or a client that’s going well, you shouldn’t jump off that call to join the next one. But I also believe that, if you’re planning out your day, you should bake in enough time to have margin between calls. Needless to say, being late immediately makes me lose trust because I believe that you can’t manage your life or company appropriately.
Don’t Get Defensive
It’s my job as an investor to ask questions. When I do, I’m being curious and trying to understand the various intricacies of a business in a very short amount of time. Which is why it’s super awkward when someone gets defensive when I’m just trying to get to know them. It makes my brain start asking a lot of questions. Are they also defensive with their team? Will I be able to ask them questions down the road without them getting defensive? And, what’s going on with them personally that’s causing them to see my questions as an attack? You don’t want your potential investor wondering about any of these things. So I tell founders to remind themselves over and over again that investors are asking those questions just because they want to get to know you and not to see them as an attack on their business or on them, personally.
Keep Your Ego in Check
I join some calls where the startup founder is amazing. Where I’m so lucky to be on a call with them. Where they give me short answers because they have so many other important things to do than to be talking with an investor. Still, having confidence and being busy doesn’t have to translate to an inflated ego. Neither the investor nor the founder should think that they’re better than the person on the other end of the line. If you do, it tells me that you have some other confidence issues and it’s just not a good look, in general. But ego also gets in the way of us both sharing information freely with one another, so I would just say to try and keep a low ego on your calls with potential investors.
Follow Up Well
This is such an easy one to do but, sadly, I rarely see founders do it well. If you’re in a job interview with a potential company, you should always follow up with a thank you note and include something interesting about the meeting with your future new team. I don’t see many founders do this when it comes to speaking with investors. Even worse, even when I ask a founder to follow up with something after our call, I often never get it. Or, I’ll get it but a few days after they said they were going to send it to me. So just make sure that you follow up—and follow up on time.
Keep Following Up
About a year ago I was looking to invest in a company and couldn’t make up my mind if we should invest or not. So I wasn’t getting back to the founder quickly because I couldn’t decide. But every week, I would get an email asking how things were going on my end and what else I needed from the founder, and it helped their case more than they even know. They weren’t arrogant or aggressive but were actually genuinely curious about how my decision-making process was coming along. It made my decision to invest in them that much easier. Side note—in my experience, the difference between arrogance and genuine curiosity usually looks like not demanding things from me, making me feel guilty in any way, or acting like I owe you anything beyond communicating back in a timely, polite way. Don’t pester investors, don’t tell them things like, “I know you’re busy, but I am, too…”, and don’t—please—say things like, “I’m counting on…”
Read Up on the Investor Before the Call
This is another easy one that I see so few startups do. Just read the investor’s website for what they’re looking for—and what they’re writing about. You’ll garner incredible information about what the investor actually cares about. Take, for instance, what I’m writing in this blog. All it takes is five minutes to read what I’m looking for and you’ll know exactly the way to win my trust.
Strategically Reach Out
Most startups I know use the shotgun approach when reaching out to investors. Meaning, they shoot, the bullets go everywhere, and they assume that one will eventually hit—just like a lot of people do when looking for a job. I just don’t think that it’s the right way to build trust with investors. Instead, take a day to strategically think about what kind of investor you want and then spend another chunk of time researching which investors around the world fit the criteria you’re looking for. Compile their contact info and then reach out with intention and you’ll automatically build trust. This should be relatively common sense. What happens when you get a call from a random telemarketer who doesn’t know you from Adam? You don’t care about them. But when you get a call from someone who says, “I know about you from your friend. And I’ve heard amazing things about you. Would you be open to a quick call?” You’re so much more likely to jump on that call. So my encouragement would be for you to figure out what kind of investor you actually want and then go and find the ones that are right for you. They’ll be much more likely to pick up the phone when you say, “I’ve heard so much about you and think you would be a great fit because you’re investing in companies that are identical to me for X, Y and Z reasons. Would you be open to a call?”
A ton of startups show up to calls with a crappy deck that isn’t laid out well. Getting your deck in front of a designer is the best investment you’ll make in your company when you’re starting out. After you do that, make sure to run your pitch by a few friends. You’ll be amazed by the feedback they give you. And trust me, you’d rather that feedback come from friends first and not investors, while you still have a chance to rework your deck.
Ask Two Questions Before Your Call Ever Begins
First, ask about the call’s agenda. And, ask if there’s anything you should prepare for before the call. This rarely happens but you better believe I immediately fall for the company when it does. You can tell that, when startups do this, they’re taking the discussion with an investor seriously. They want to show up well. They want you to trust them. So the more you can ask about what the investor wants for the call or meeting, the better the meeting will go and the more trust you’ll have with the investor.
This is plain and simple. Don’t lie. Unfortunately, it happens way too often. Startups will fudge numbers or oversell what they’re doing. And investors can sniff this out pretty easily. But when you’re honest, even with information that doesn’t help your case, it builds that trust between you and the investor. For instance, we had someone interviewing for an Account Manager job with us recently. The conversation was going pretty well, but when we asked her if she thought she would be better for an Account Manager role or another position we had open, a product-focused role that we hadn’t even formally created yet, she told us that she’d be better for the product role. Meaning, she was telling us that the job she was applying for wasn’t the ideal job for her. Which was awesome. That is some serious honesty when you’re presently in the room to land a different job. But it built so much trust between the two of us and we ultimately ended up putting the product role in front of her.
Believe In Your Product and What You’re Selling
Finally, if you want to build trust with your investor, you must believe that what you’re selling is actually something worth investing in. If you don’t believe that it’s a worthwhile investment, the investor will pick up on that and lose trust in you. So don’t start calling on investors until you believe that you have a product or service that actually deserves investment. Your excitement and confidence will shine through, giving the investor trust that what you’re selling is actually worth backing.