Create a Sense of Urgency When Pitching Investors



Good investors are always spoilt for choice when it comes to deciding which startup to invest in. This is one of the primary factors that contributes to delay in getting the deal done.

Other factors include due diligence, work overload, and sometimes power games. The longer a startup goes without cash the more desperate the founders become and likely to agree investment on less favorable terms. To put it bluntly, delay in securing funding kills startups.

One technique for getting things moving is to subtly introduce a sense of urgency into the deal. If other Angel Investors and Venture Capitalists are genuinely interested in investing (you should not be putting all your eggs in one basket), then let it be known. Human nature dictates that we become more interested in something or someone that others want.

How you do this is critical, as any blatant attempt to manipulate the investor will almost certainly kill the deal. Putting it out there to contacts you know in the investor’s network is one way of creating awareness that you’re the subject of investor interest.

Another approach is to indirectly refer to something another investor has said to you. Underplaying the other investor rather than overplaying them e.g. ‘a VC we met with recently suggested we should add feature X. Do you agree?’

Integrity is non-negotiable and whatever you say should always be true. An understanding of investor and sales psychology and the ever-present power dynamics is, however, essential to funding and startup success.

Reprinted with permission.

Photo Credit: CC by Allan Reyes

About the author: Martin Soorjoo

Founder of The Pitch Clinic, Martin Soorjoo is a pitch strategist. He coaches entrepreneurs world-wide, helping them launch and raise funding. Prior to founding The Pitch Clinic, Martin spent 15 years as a former award winning attorney. He has worked with start-ups and investors, including senior investment bankers, venture capitalists and angel investors. During this period Martin raised several million dollars, including negotiating one deal worth $75 Million. This experience has equipped him with unique insights into the challenges start-ups face and how investors make decisions. He is a Certified Master Practitioner of Neuro-Linguistic Programming (NLP) and an expert in body language.

Martin is the author of ‘Here’s the Pitch‘.

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