Why You Matter – A Personal Note From an Investor

Why You Matter #1

Why You Matter - A Personal Note From an Investor

A young Vision Master with an exciting product idea near market-ready sat with me and a fellow investor in our modest conference room in San Diego.  He came loaded for bear, with his laptop and a presentation ready to show.  The conversation continued for an hour, yet we never let him open his laptop. I could see that he was itching to show us the pitch deck yet we were only interested in him and not the product.  Frustration.

What we wanted to know is could he run a growing company, really, in times of stress?  We know that 80% fail due to the CEO or the team being unable to carry out the plan.  This is what we must avoid in order to "hit the sweet spot with every investment."  And we do. So, we didn't relent and continued to explore him as an individual and leader.

  • What kind of family and relationship does he have?
  • What were his long-term goals?
  • Where does he come from?
  • What motivates him?
  • What's his method for managing others?
  • When does he give up?
  • How does he want to work with investors?
  • What's his process for handling the inevitable pivots?
  • How does he make decisions?

And so on.The fact that he tolerated our agenda for the meeting was a strong indication that he could tolerate us and that he's is willing to be known as a person, not just as a product, as a leader not just as the leading edge.

Even if we don't ever invest him or refer him to other investors, he learned a great deal about what's important in a conversation with investors and executing a plan. And he became a candidate for a warm trusted referral. In this case, we decided to continue forward.

Henry VIII imageI've got to admit, this meeting could be incorrectly interpreted as a meeting with Henry the Eight, the infamous monarch known in Shakespeare and song for beheading wives who couldn't bear him a child, and the heads of anyone who couldn't satisfy him. "Make us laugh or off with your head."  That is after all the way many investors treat innovators.   "We've got the money; you need us; so do it our way or else."  Truly, it wasn't that way at all, because the difference is that we honored him and we honor you.

Just the relative size of the investment tells the story.  We realize that at very most we might invest 1% of our personal assets in your company, or if it becomes a VC investment, then at very most 5% of the funds we manage. You, on the other hand, are investing all of your available cash, all of our available time, your full reputation and your relationship with family and spouse.  You're all-in; we're just patrons, backers. We get it.

And this is YOUR idea.  It's great ideas, great innovations and the leaders behind them that move the world.  The financial backers play a part in that drama, but you play the larger part.  You matter. So we honor and respect you, though it may feel like a meat-grinder sometimes when dealing with us.

What's important to get here is that we honor "rational innovation" not just innovation or creativity for its own sake.  Here's a story of dis-honor. I invented a hovercar when I was 10 and actually drew diagrams as a class project.  I thought, in my mind, I could build this hover car.  Did I?  That was more than 50 years ago and there are still no hover cars, well, hovering. Maybe the fact of failure was due to physics, economics or my personal ability.  Maybe all three.  It was a fantasy, not an actionable plan.  That's fun, but it's not honorable.

So rational innovation, an innovation which is honorable, is innovation grounded in reality.  It's the ability to create an innovation backed by a plan that you and your team can actually execute (to complete the Henry VIII metaphor) that's honorable.  And it's you and your team's willingness to do what it takes to execute the plan.  Maybe I should say "carry out" the plan.  It's your ability to first conceive the plan and then carry it out that is truly honorable.  This is one huge challenge, mark my words.  We don't take the challenge lightly and neither should you.  That's why it's honorable.

I'm going to take this further in the next blog on this subject, giving you some useful tools to transition if necessary from fantasy to factual innovation.  In the meantime, take another read through a draft of my upcoming book Born to Star, available on the Intelliversity website.  And reread the last few months of blogs I wrote about evoking trust and making investors sit up and notice because they are Trojan Horses.  See if you can find what's hidden inside them.

Key Takeaway:  honorable innovation is rational innovation, innovation grounded in reality - which is mainly, your bona fide ability as a person and as a leader to carry out your plan, without just giving it away to someone else to implement.  Keep reading my blog for reality-based formulas for execution success, which translates into honorable innovation and getting funded.