Earlier this year, I hosted a series of office hours for founders. I was on mat leave and found myself itching to stay connected to the tech community. These office hours were a way for founders to discuss their business or fundraising challenges with someone who has seen a thousand companies but has no stakes in the business or relationship. It created a rare space for honest founder-investor conversations.
The companies I spoke to ranged the gamut from AI-telecom software to dating apps to biomaterials, but the questions that came through were surprisingly consistent:
Am I focusing my efforts in the right place?
I asked founders to come in with one challenge that we could focus the conversation on. Inevitably, by diving deeper into their business, we’d realize one of two things:
- There was a deeper structural challenge at play. Something more fundamental had to be addressed before we could get to the tactical decisions. One founder wanted to talk about channel testing for new users. But we soon uncovered that the more pressing problem was the moat and pivoted the discussion there instead. These conversations helped create the map and plot the journey.
- Founders weren’t actually working to address their core challenge. Sometimes founders knew exactly what the bottleneck was but spent their time chasing easier or adjacent wins. One founder knew the constraint was on the supply side of their business but built their website and messaging to generate demand. Redirecting their public image to attract and convert suppliers became the center of the discussion. For these conversations, we needed to focus on navigation.
Should I take venture capital?
I’m the first to advocate that venture is not a fit for every business. Just because it’s a loud asset class, doesn’t mean it’s right for you. Getting a chance to openly talk about business model, growth potential, and personal preference gave founders the confidence to pursue funding paths that made sense for them. Often, VC was still on the table. But for others, it opened their eyes to the possibility that success didn’t have to include venture, exclusively or ever.
It’s easy for founders to believe that venture capital is the only successful way to grow their business. That’s the trap of the once free flowing venture investments and big funding announcements dominating the media. Nobel Laureate, Daniel Kahneman, calls this WYSIATI – What You See Is All There Is. It makes venture seem like the path instead of one of many options to evaluate.
How do I make my pitch land?
Say VC is still on the table for you. Well, how do you get an investor’s attention? Usually these questions would be directed at the details of the deck. However, in all cases, we needed to take a step back and get clear on the real proof point(s) and how to get it.
If your pitch isn’t converting to any diligence meetings, something fundamental is missing, be it focus area, business model, or traction. Better story telling isn’t the fix here. Instead, spend time on diagnosing what the problem really is and on addressing it. In most cases, taking a customer-first approach versus an investor-first approach will serve you well. Think “what do my customers need?” not “what do investors need to hear?”
Across all these conversations was the same undercurrent: transparency. Founders could say the honest version of their problem and I could give my honest read on it, because neither of us had anything riding on the answer. The result was raw, energizing discussions.
And you don’t need some investor’s office hours to get that for yourself. Next time, ask directly, “I’m looking for some honest feedback. If you had nothing to gain or lose here, what would you tell me?” Odds are, it will open the door for people to give you a real answer.