As a member of an angel investment group for years, I’m sometimes surprised to see founders with a good technical business case get rejected for funding, while others seem to have a hidden quality that gives them credibility to be fundable despite some missing elements. Investors often chalk this up to inbred charisma or charm, but I’ve often wondered if could be a learned skill.
I found a recent book, “Backable,” by Suneel Gupta with Carlye Adler, which solidifies my belief than anyone can learn to be perceived as more credible and persuasive, and it’s a skill that every entrepreneur and business professional needs to master. Here are seven key steps which both Gupta and I agree are necessary for success:
- Persuade yourself before you try to convince others. Passion and energy are key indicators that you believe strongly in what you are proposing. Just because someone else tells you that you can make money with this idea, doesn’t mean you can sell it. Do the research to fully commit to the how and why before you try to persuade others.
- Put yourself in a story that makes your case memorable. Facts and figures can only go so far in convincing investors that your solution is a good one. People listen and remember a personal story and impact more than a large chart of facts. Highlight a personal anecdote and keep it in sight to make your message hit home and become real. For example, I know from experience that it is hard to turn down a funding request from an entrepreneur whose solution has rescued him from a health crisis, and now he wants to offer it to a large population of others facing the same challenge. I can easily relate.
- Highlight some key info that goes beyond normal sources. People give real credibility to fresh insights that could not have come from Google search. Do something more, like assembling a group of potential customers, and convey unique insights you learned. This indicates your extra effort, and communicates your results already evident.
- Show momentum that makes your vision inevitable. Show evidence that your vision is already underway, and appeal to the natural fear of every investor – the fear of missing out (FOMO). An example is the shift to working from home, caused by the pandemic. We already see momentum on new video tools, and there are many more opportunities. Elon Musk used this approach with Tesla, capitalizing on the growing momentum of electric engines, and a strategic mistake by GM which antagonized owners. His new technology and strategy was convincing, and now is a new benchmark for transportation.
- Draw people into your story to make them insiders. This emphasizes the value of networking with potential investors so they have inside knowledge on your proposal, rather than a cold first look when you are asking for money. Pre-pitch discussions and warm introductions are a key practice for drawing people in, and building advocacy.
- Adjust based on feedback from many practice rounds. Entrepreneurs who think they can “wing-it” with investors through natural salesmanship are rarely successful. There is no substitute for practice, practice, and more practice, with active listening. Ask people to explain back to you what they heard, and then make improvements with each iteration. Gupta reminds us of the “Rule of 21,” meaning success comes after twenty-one practice rounds, which keynote speakers and highly backable people easily relate to. In the world of new entrepreneurs, giving your pitch twenty-one times before success is not unusual.
- Don’t let your ego show and make people defensive. Smart business people are quick to detect fake smiles, acting, and bravado. Practice being humble, yet confident and sincere, based on knowing your proposal inside out. Find a few sponsors and advocates to support your position, and don’t hesitate to bring them into the discussion.
I’m sure that you can see that none of these steps requires a super-human effort or special attributes from birth. These same initiatives apply not only to entrepreneurs seeking funding, but also to anyone seeking career changes, or re-entering the workforce after a life-changing event. You too can have that “it factor” that will make people take a chance on you when it really counts.