How to Pitch Investors and Win #3 - Become the "Investor Whisperer"
This week I have a secret to share with you.
Yes, I know that everyone always says they have a 'secret' to share, but this one is really valuable and very practical. With it, you'll be able to gain the upper hand with investors while you pitch.
Wouldn't that be a really refreshing change of pace?
So, listen up and you'll be ahead of the competition!
Last week we began to look at the three brains (inside your investor's head) that you, the visionary entrepreneur, have to move through in order to reach the trust threshold with investors and have a serious funding conversation. Now, unless you're an obvious psychopath or have an obviously lousy idea, probably you can get past the croc-brain -- that ancient part of the brain that controls fight or flight. This week, we'll assume that you can get the OK from the croc-brain of an investor and now have to deal with the dog-brain -- the social identifier that asks "is this the type of person I like to deal with? Is this person someone I can associate with?"
What I'm going to share with you in this post is a surefire way to win the battle with the investor's dog-brain, but not in the way you might think. It has very little to do with impressing them with how likable and socially acceptable you are. Instead, it has to do with bringing the investor's dog-brain to heel in a very specific way that most people simply have no clue about -- which is why most people are ineffective in communicating at the most important moments.
But let's review for a moment. Our context here is the pitch. The pitch is often made up of a PowerPoint and you explaining your idea, model, value proposition, team strengths, etc. Recall that the croc-brain is initially in defense mode -- "I probably should kill or run." So, each part of your presentation has to be a combination of new and exciting, but not threatening. It needs to be succinct and to the point (the croc-brain has little patience) and neither confusing nor boring. In a prior post, I walked you through a template for doing a great pitch. Take some time to review that post and in the coming weeks, I'll share more with you about the art of creating a pitch deck that wins. For now, let's assume your pitch meets the expectations of the croc-brain in the first few minutes and you're dealing with the mid-brain.
It can be easy to underestimate this part of the brain (the mid-brain and what I refer to here as the 'dog brain') because we all tend to think that we sort of "fit in" societally, unless our whole point and plan is to be a rapid anti-establishment type -- which won't generally appeal much to the investor class anyway. But the mid-brain isn't as simple as you might think to get an OK from. It's that part of the brain that makes value judgments based on whether you're worth the time the investor knows he or she will have to spend with you once they invest. So, it's not just a matter of whether you fit in, in a general sense, but rather whether you fit in with them as someone they're inclined to form an ongoing relationship with.
But the challenge you'll encounter is that even if you look the part and talk the part, your prospective investor may well have a dog-brain-based bias against you, simply because they feel they're superior and you're inferior -- they're the top dog and you're the underdog.
“There is a fundamental disconnect between the way we pitch anything and the way it is received by our audience. As a result, at the crucial moment, when it is most important to be convincing, nine out of ten times we are not. Our most important messages have a surprisingly low chance of getting through. You need to understand why this disconnect occurs in order to overcome it, succeed, and profit.”
It's at that point, where you most need to make a positive and memorable impact, that you'll oftentimes be least able to do so -- until you learn the secret to turning the tables on investors.
So . . . you're needing to overcome the objections and defenses of the dog brain. How do you do it?
Think about the world of canines. Who dominates?
The alpha dog, right?
Now, at the outset, your investor will think he or she is the alpha dog. How do you shift that around and get yourself in the power position? And how do you do so in a non-threatening way so that the investor's Croc brain isn't reactivated?
The trick is demonstrating leadership without being threatening. You can learn more about how this process occurs in the canine to the human world by looking at The Dog Whisperer, a television show hosted by Cesar Millan. I use the analogy because, while your investor certainly isn't a dog on a leash that you can tame, nonetheless at this point you are dealing with his or her dog brain!
So in a very real way, you need to become a "dog whisperer" . . . get the dog brain of the investor to 'heel' so to speak.
How you go about doing that is the secret I promised to share with you today.
To share this secret with you I'll return to the work of Oren Klaff. The trick to turning the tables and putting yourself in the power position is a process Klaff calls "frame control." According to Klaff, "A frame is the way your brain mentally packages your power, authority, strength, information, and social status." So at the outset of the conversation or pitch, your investor naturally feels that he or she is in the superior position. After all they have the money you need. YOU need THEM. THEY are the PRIZE.
So, as Klaff would say it, your frame is weak and their frame (in your mind and in theirs) is strong. You need them. They know it and you know it. So, at the outset they may act superior and arrogant. Your job is to re-frame that by coming from a larger frame -- a more powerful and compelling mental place.
After you do this, the framework of your conversation will be THEY need YOU. YOU are the PRIZE.
Klaff calls this Moral Authority Reframing.
In brief, this means that you gain the overall advantage by taking the morally superior position and communicating that. It turns out that most humans respond powerfully to the moral high ground, according it more power and trust than other forms of power-seeking. And, this process takes place in the dog brain -- which determines what is most socially acceptable and desirable.
I hear you asking. . ."well, ok, so what is my morally higher position?"
I'm glad you asked!
It is deceptively simple: YOU are the creator, the visionary, the one who can bring tremendous value to people, while the investor is simply someone with money. Without you, none of those things are possible. You have a plan and a vision and a team that can do great things. They just have money and frankly, lot's of people have money so they aren't your only hope.
Now the way that you communicate this and take the moral high ground -- this is really important -- is by telling stories that are morally impactful and demonstrate that you can get results. Essentially, that you and your vision are important and compelling and that you and your team can and will get the job done. For more details on how to position you and your idea and team this way, I advise you to visit www.pitchanything.com.
For now, just consider that it's not being nice, folksy, agreeable or even good looking that will turn the tables on investors and put you in the power position. Nothing wrong with those things, but they aren't decisive. What makes a difference is being a "difference-maker." What matters is communicating that you and your vision are important to the world and that you and your team are going to bring your vision to life. And the investor? Well, if they're fortunate, you'll let them come along for the ride.
YOU are the PRIZE.
You do not do this by being arrogant. You do it by being of great value to the world and communicating that value in a clear and concise way that will impress the investor's dog-brain. After that, the investor's dog-brain wants to follow YOU. You become someone worth supporting, because you are a difference-maker. Now the investor is really listening.
Key Takeaway: At the outset of a pitch (or first meeting) the investor will greet you with his or her "croc-brain." If you get its OK you'll be dealing with the "dog-brain" (the mid-brain). The key to successfully navigating that part of his or her brain is to become an "investor-whisperer," by using the moral reframing suggested here and developed it in great detail as explained by Mr. Klaff. That involves telling stories about you, your vision, your team and your ability to get the job done, which puts you, the vision master, in the moral driver's seat within the conversation.