I speak to startup founders all day. Most are confident in their ability to grow a big business and express optimism about the future. You have to be optimistic to take on a challenge as hard as starting a business from scratch. This optimism will carry you through the difficult days and inevitable setbacks that every startup has on their path to glory.
However, too much optimism can quickly turn to something uglier. When optimism and overconfidence become arrogance, it can doom a founder’s chance of success. Sadly, I have seen this happen several times to well-intentioned people. Maybe the founder was having a bad day when they spoke to me. Or maybe they are just beaten down from too many “no” answers from investors. Either way, it ain’t pretty.
What does arrogance sound like from a founder? Sometimes I hear things like “this is the last round we will ever raise so you need to invest now or never”. Are you saying you wouldn’t take money from Mark Cuban or A16Z in the future? Then you are really mean I am just not interesting enough to matter. Or worse, “we will only be taking money from larger investors later, so you need to get in now”. You’d be happy to take my money now but don’t see me as important enough to talk to later? Yuck! I understand that founders want to create FOMO but find a positive tone to this. Tell the investor they are welcome to wait for more traction but that the valuation is sure to go higher and the minimum check sizes will go up.
Another version of arrogance I have seen from founders comes when I question a business model or go-to-market strategy. Instead of thoughtfully answering the questions, the founder will go on the attack telling me I don’t know what I am talking about. Maybe I don’t, but if you are asking for someone’s money it is your job to explain your business in a way that everyone can understand. Be patient, even if you think the investor is clueless, and work through these meetings with optimism and class. You never know who else that investor is going to talk to about you in the future. They may never invest in your company, but if they tell other investors you were arrogant or rude with them, their friends will not invest in you either.
Thanks for reading today’s post, I hope this helps you calibrate the right tone for your conversations with investors.