Beware the Frankenstein monster of capital raising

Today I’m calling out the Frankenstein monster in the room when it comes to capital raising.

You may have inadvertently created one of these monsters yourself while crafting your investor pitch.



Frankenstein monster



It starts out with a grand vision, just as Mary Wollstonecraft Shelley’s title character Victor Frankenstein did in the classic novel.

Victor Frankenstein set out to create a man with the vision of starting a new and noble race.

Unfortunately, the man he created by putting together pieces from various different corpses inspired fear and loathing in everyone who met him.

Lonely and miserable, the man turned into Frankenstein’s monster and ultimately turned upon his creator.

While perhaps a touch dramatic, the analogy transfers to investor pitch creation surprisingly well.

Here’s how it goes.

You create your initial pitch. It isn’t perfect, but you think it’s pretty good.

It outlines the gap in the market, the pants-on-fire problem you’re solving, who’s likely to buy it based on those who’ve already shown interest, and what the ultimate projected scope of the opportunity is for an investor.

Then you start pitching.

You pitch to one investor who has a suggestion on something to include in your pitch that you hadn’t thought about.

Then you pitch to another investor who makes another suggestion about something that should be outlined.

Then another, and another.

Turns out they all have different ideas and suggestions on how to improve your pitch.

You’ve spent time researching investors who are aligned with your values, and who invest in companies like yours, but when you meet with them – they still have wildly differing perspectives.

“You need to demonstrate a big enough market, but we also want to see a growth forecast.”

“Your team slide should be at front; or your team slide should be at the back.”

“You’ve only got 10 minutes to pitch, but I need to a full competitor breakdown.”

By the time you’ve met with 10 investors, your pitch has become like Frankenstein’s monster.

Put together in an awkward, incoherent way from fragments of suggestions from a slew of investors all with vastly different business and investment experiences.

It no longer makes any sense and is definitely not having the effect you wanted it to have.

No love. No signed term sheets.

So, here’s what we need to acknowledge and plan for.

Investors give feedback based on their experience.

Every investor has different experiences, different things they’re looking for, and different areas of expertise.

Investors almost always want to help the startups they speak with – even if they don’t plan to invest in their company.

So, they spend time working with the founder on improving their pitch, redefining the problem, helping them rethink their market potential, or how they explain their traction effectively.

As a founder – this can at first seem helpful, and it’s easy to want to take this feedback on board.

But as you continue to meet with investors, you get more and more feedback:

‘Be more vulnerable!’

‘Be more confident!’

‘Explain the risks in your business model!’

‘Show your growth projections!’

‘Don’t show your growth projections!’

The feedback starts to get overwhelming. And you still haven’t raised any money.

We’ve watched this happen to founders time and time again.

Here’s how to keep control of your pitch while still taking suggestions on board.

When you get feedback from investors, it’s a great idea to record the feedback and discuss it in detail with the investor – why they believe it’s important.

Think of investor feedback in the same way that you would review customer feature requests or feedback.

Look for patterns of feedback.

Rather than implementing the feedback into your pitch straight away – record it in a Pitch Backlog – and assess whether or not you’re getting similar feedback from other investors.

 

If you are – then incorporate that particular element into your pitch story by making these crucial changes in one go so that you maintain the cohesion and flow of your pitch.

That way your pitch will remain coherent and give the right clarity to the right people at the right time – exactly what’s needed to bring in those investor dollars.

If you’re on a capital-raising journey now, and have questions about your investor pitch, you may be wondering who you can turn to for assistance.

Time and again we meet with founders who are in this situation.

Unfortunately, they’re wasting their precious time (and money), going round and round in circles creating and updating their pitch deck, ad nauseam, to little positive effect.

Then they switch to LeapSheep, and under our guidance they’re finally able to make positive progress.

If you’d like to ask your questions about your investor pitch, we’d love to meet you – Click here to request your Startup Builder™ Strategy Session.

 

Whenever you’re ready, here’s how we can help you.

If you’ve got a startup idea, or you’ve already embarked on your journey – you might be facing one or both of these situations.

  1. You’re struggling while going it alone. Worse, you’re wading in the muddy waters of some not-so-great advice.
  2. Perhaps you’re trying to raise capital for your startup and you’re hitting a dead end. Raising capital is a notoriously difficult thing to do.

Globally, only 0.74% of startups manage to raise capital at Seed stage. Despite this, 16% of startups we’ve worked with were able to raise capital at Seed stage.

If you’re ready to step up and get the help you need, our Startup Builder™ program was created especially for you.

The Startup Builder™ process is specifically designed to take you all the way from idea to global success – in a way that’s simple, sustainable, and scalable.

If you’re ready to grow your revenue, profit, and social impact faster without wasting time and money on the wrong things at the wrong time, click here to request your Startup Builder™ Strategy Session.

 

Did you find this article valuable?

Go here to sign up to receive future weekly editions in your inbox.

On LinkedIn? Click here and press “follow” to get notified of the startup insights I share.

Share this article

Subscribe to our newsletter