Are You Fundable #9
We’ve covered a lot of ground the past few weeks and I hope you’ve gained a deeper relationship to why trust is so important in building relationships with investors.
Did you get the allusion there?
Trust is a relationship. Funny thing about relationships, they tend to be strongest at the beginning and then again deep into their course. We’ve all experienced the amazing feeling of love and excitement at the beginning of a new relationship. And, many of you will have experienced the graceful ease of a very mature relationship, seasoned by time like good wine.
In concluding this series on trust I encourage you to focus on the long-term. I know it’s hard not to focus on the key next step with an investor and to have your attention on getting the check. That’s important of course. But, for that investor, it’s a long-term relationship. Most deals don’t pay off in a year or two or even four or five. So, you’re in a courtship and the goal is a long-term relationship. A lot happens in the middle of the relationship but the beginning and the end really characterize it best.
Let me prove to you that the beginning and the end are most important . . . read the following paragraph:
I cdnuolt blveiee that I cluod aulaclty uesdnatnrd what I was rdanieg. The phaonmneal pweor of the hmuan mnid, aoccdrnig to a rscheearch at Cmabrigde Uinervtisy, it dseno't mtaetr in what oerdr the ltteres in a word are, the olny iproamtnt tihng is that the frsit and last ltteer be in the rghit pclae. The rset can be a taotl mses and you can still raed it whotuit a pboerlm. This is bcuseae the huamn mnid deos not raed ervey lteter by istlef, but the word as a wlohe. Azanmig huh? Yaeh and I awlyas tghuhot slpeling was ipmorantt!
Cloud you raed taht?
You could, right?
The point is that our consciousness is able to thread together entire words even when they are spelled completely wrong – as long as the first and last letters are correct.
Think about that . . .
Now take a leap with me. I assert that relationship works the same way. . .a strong beginning and a strong ending can trump a rough and tumble middle. And that’s really important because things rarely go as planned. So, the goal is to start strong with your investor and finish strong by doing a great job with his or her time, energy, reputation and money.
Starting strong builds strong relationships. You can draw on that strength to get through the middle so that at the end the relationship survives, even thrives. Without a strong start, however, chances are the relationship won’t survive the middle.
The Seven Pillars - Here’s How to Start Strong
- Understand that you must push the trust button before the greed button
- Push the trust button by seeking relationship with your investor
- Forge relationship by being open and honest and revealing your flaws
- Reveal those flaws unemotionally and with an idea about how you’ll compensate
- Build a deeper relationship by asking for their help and input
- If they request something from you deliver it as asked and on time
- If they don’t ask for anything, offer to provide something and deliver as in 6 above
Those are the seven pillars of developing a strong relationship with your investor and that will breed trust. Trust will breed the funding you’re seeking, but what’s more, it will breed the investor’s time, energy and reputation (including, perhaps, key contacts and resources) that can help your business grow and succeed.
At the beginning of a meeting you MUST prove yourself to be trustworthy. At the end of the relationship, if you’ve done your very best, hopefully there is a nice payday for both you and your investor. In the middle life happens. There will be ups and downs; victories and setbacks. But if you do things right at the beginning that rough and tumble middle will evolve within a trusted relationship of trust and support and help from your investor.
I promised you in my last post "How to Deepen Trust - The Power of Promises", that I’d reveal whether John, our intrepid entrepreneur, kept his promise to Mary, our busy, but very interested, investor.
Did John follow through and provide Mary the data she needed prior to their scheduled meeting with his team?
Before I answer that question let me pose another one . . .
What do you want more than anything in the world?
If you ponder this question for a while you’ll realize that there is no one answer, because, like most people, you want all kinds of things at any given time. Consider that your investor does as well. He or she is a human being just like you, with hope and dreams and fears and worries. We call this the human condition and it’s important to this conversation about building trust.
Do you know why?
It’s important because at the end of the day, we all make decisions based on whether we think our choice will lead us towards what we want. So I hope now you are seeing something vitally important in this entire conversation about building relationship and trust with your investor.
Have an idea of what I’m getting at?
You know what you want, right?
But do you know what THEY want?
Do you know what their hopes and dreams and fears and worries are?
When you meet with your investor you need to begin to figure out what those things are for him or her. If you don’t, you’ll never really know how you can help him or her achieve them.
See the point here?
It’s not just about what YOU want. . .it’s about what THEY want, too
Find out what they want, what their hope and dreams are. . .that’s a powerful context for your meeting. Accomplish that and tailor your pitch around their primary objectives and you’ll shine! But remember that you need to establish some level of trust before they’ll probably share their hopes and dreams with you in a meaningful way. I’ve coached you on how to do precisely that for the past few weeks – now you know why it’s so important.
So, did John follow through and earn Mary’s trust?
The Tale of Two Endings
In one ending to this tale he did. John provided Mary the data, she attended the meeting, trained his staff, got to meet the C-Team and began to forge a deeper relationship with John and his company. Eventually, she became John’s lead investor, a key advisor and eventually a Board member in his growing business. She also brought contacts to the table that provided additional capital, market access, and technical expertise.
In the other ending to the story, John did not follow through. Lacking the needed information, Mary could not prepare for the meeting and canceled. With her very busy schedule it just wasn’t workable for Mary to schedule a new time with John and his team. She asked him to get back in touch with her in a month. When he tried, she was difficult to reach. Eventually, they spoke again, but Mary had committed her time and funds to another project. She wished him well and they did not speak again.
Which ending to the story would you like to create with your potential investor?
Key Takeaway: Hold investor meetings within the context of building trust and forging a relationship, not getting a check. The check is a very strong possibility if trust is present and you build a real relationship. During the meeting, an investor may ask you for something (if they don’t, volunteer to provide something). This is a great opportunity to build trust by making and keeping a promise. Even though the promise you’re asked to make may seem small to you, consider that for the investor it is a big promise, because how (or whether) you perform either forges or destroys trust.