Ask any VC how excited on a scale of one to ten they are about their latest deal, and they’ll tell you eleven out of ten. Veterans will probably be a little more cautious and tell you they’re at a ten out of ten—but despite knowing all the risks, a VC simply isn’t going to get over the line unless they’re pretty blown away by an idea.
That’s because of the simple math of competition. I get 2000 things passing through my inbox in any given year, and I make about ten investments per year.
How excited do you think I am if I’m only picking the top 10 out of 2000? Do you think any of those handful of deals are seven out of ten? I see TONS of sevens—and they’re often the hardest ones to pass on. They’re nothing necessarily wrong with them. The team is good. The idea is good. It’s just—good. Nothing particularly striking that makes you think about it days and nights after the meeting.
I’m sure it’s incredibly frustrating for a founder to know that you have something workable and to not get any particular negative feedback, but not to get any traction in fundraising. You’re probably left scratching your head as to why.
It might be that your company is a seven—a perfectly acceptable, but not particularly exciting seven.
If you’re trying to be one of the best ten things I see in a year—that I’m willing to risk my investors money on knowing how hard it is to build a company, then a seven just isn’t going to make it.
That’s where the fundraising strategy comes in where you need to decide what you can do to really put your company over the top early. Maybe it means giving extra equity to a standout hire that really takes your team to the next level. Perhaps it means getting a bunch of customer LOIs even before you have the product ready—leaving VCs to wonder how you even got a meeting having so little built.
Think about asking investors what would make your pitch a ten—what crazy accomplishment that they could imagine would be gamechanging for your pitch, especially if you’re feeling like you’re not getting negative feedback. If you’re not getting negative feedback, but you’re not getting a check, you need to find out what you’re missing to move from a seven to a ten.
Reminder—this week I’m hosting another charity pitch workshop session. If you want me to go really in depth on fixing your story and presentation, while supporting some good causes, check out Fix Your Pitch for Good.