Convince Investors to Fund You Page 3

  The Third Alternative requires continued conversation and creativity.

  Coachable

  Why do you to need prove that you’re coachable to investors? Because investors have seen uncoachable people crash and burn and take their companies down with them.

  Several investors sometimes see themselves in young people on their way up. Such investors have thoughts like: “Oh, you look like someone who is a ‘young me’ when I first started. I can save you from so many big mistakes.”

  It works best if you come across as all three: confident, competent and coachable. Some people are “tech-competent” and “people-clumsy.”

  Instead, a mature businessperson has all 5 Crucial Characteristics: Confident, Competent, Connection-building, Conflict-skilled and Coachable. That’s a mature person.

  Have a Story About How You Created Great Results by Being Coachable

  Years ago, as a first-time feature film director, I had the opportunity to be coached by veteran actor George Takei (of Star Trek fame).

  George (Lieutenant—later Captain Sulu—of Star Trek feature films) saved me from a bad scene I had written for the feature film I was directing.

  When I met him to discuss a role, he proved gracious and warm. I showed him some storyboards. One depicted a scene, with just one light cutting through the darkness, illuminating our hero. He sits at a small table at one in the morning. He sheds a single tear. That teardrop falls into his teacup. As it strikes the surface, the teardrop makes a tidal wave in the tea. An extreme close-up. Slow motion, too.

  This imagery sprung from my mind, fresh from directing music videos.

  “Uh, Tom?” George asked gently. “Isn’t that a bit melodramatic?”

  He quietly coached me to reconsider the scene. And, I followed his guidance. I saved the production money by cutting the scene at the storyboards stage. We lost no time and no funds to filming a scene I’d likely discard in the editing room.

  This has become one of my “I’m coachable” stories.

  Now, it’s your turn. Recall a time when you were coached, and you followed the guidance and gained great results.

  How does the investor know you have the traits of a good leader? The good impression rises from the stories you tell.

  Beware of How Certain CEOs Flame Out

  Unfortunately, some CEOs flame out because they’re not coachable, and they’re not connection-building. They make “bold decisions” that fail because they had not devoted effort to building coalitions and support.

  Ultimately, the Board of Directors fires them because they’re not successful at building connections with the board directors. I refer to this process as a form of “CEO suicide.”

  What the Start-up CEO Needs to Be Ready For

  Often, after I serve as a Pitch Judge, start-up company leaders come up and ask questions.

  Some of them just jump in with, “So who do you know who would like to invest in what I pitched?” Sometimes, my thoughts jump to “oh, another amateur.” By this I mean, this person did the “amateur” thing of failing to build rapport first. Then they want me to stick my neck out and risk sharing one of my great contacts with someone who is not adept at building rapport and connections.

  Still, I strive to be helpful. So, I ask a few questions:

  How much money do you need?

  What have you finished?

  Have you and your co-founders experienced a big disagreement yet?

  Many newbies to fundraising choke on the “how much do you need?” question. The solution is to think it through and know multiple levels of money and what you can accomplish.

  It sounds like:

  For $200,000, we can get this done …

  For $500,000, we can get this done and ____ and ____ ...

  About the Question “What have you finished?”

  This is a telling question. The savvy start-up leader does well to have a list of three things that he or she has finished. Why? Because we want a company leader who can stick with a project, lead people, complete the project and get results.

  Have References

  I’ll make this detail brief: Have at least three people who say, “Yes. I would definitely work with [him/her] again, given the opportunity.”

  Demonstrate You’re Coachable by Covering Your “Gaps”

  We realize that no human being can do the whole thing by himself or herself. The smart leaders look at how they can ”cover their gaps.” In my book, Shape the Future, Lead Like a Pro, I refer to smart leaders as RoiLeaders (who specialize in “Relate, Optimize, Intuit).

  The RoiLeader demonstrates that they are truly competent by admitting their gaps and hiring people to shore up these areas.

  The smartest thing I ever did was to hire my weakness.

  – Sara Blakely

  Incompetent people either try to cover up a weakness, or they might be delusional and think they do not have any weakness.

  The good news is that the RoiLeader is coachable.

  The Coachable Person is Trustworthy

  When networking, you get people to like you by listening first.

  The classic idea is that one wants a new person to know you, like you and trust you.

  For example, Ross Perot invested in Steve Jobs’ company, NeXT. Perot said that he really was investing in Steve Jobs.

  Investors are looking for someone they can trust to lead a company they invest in. Why? Many companies must pivot fast before launch and when the first version of a product gets into the marketplace. The leader must often scramble to energize members to make last-minute changes.

  For example, a company had a good plan. They would launch eight products and see what worked. They wisely realized that some products would fail. They were fortunate: Project #2 was the Thighmaster that generated more than $100 million in sales. This was their second project, but they were ready to go through eight projects.

  Here’s a story that illustrates the pattern of what often happens in the marketplace:

  Sandy decides, “I’m going to sell ice cream and people are going to eat with these spoons. Then, Sandy gets surprised. Customers say, “The ice cream is okay, but those spoons! We love those spoons. They're fantastic.” Sandy has her company do a pivot.

  What’s great about small start-up companies is that a good CEO can make a fast decision and jump on an opportunity.

  In summary …

  Recently, I asked my co-host on my podcast Introverts Own Your Voice (on iTunes and YouTube), “What will you take forward from our conversation about the 5 C’s?”

  She replied: “I think the biggest thing is that the investor doesn’t just invest in your project or idea, they’re investing in you and your capabilities.”

  List of the Five Exercises

  At my workshop, Convince Investors to Fund You, I use five exercises. The attendees rehearse powerful actions, and this process transforms their approach to critical situations. Here I will share brief descriptions of the exercises. (Participating in the exercises in-person at the workshop provides the best experience.)

  Confident – Exercise 1

  Congruent-Walk Toward the Question. The purpose of this exercise is to give the workshop attendees the experience of holding their body language in a confident manner even though they’re in an uncomfortable situation. They practice saying, “I can see that’s important to you” while they walk toward the person who asked the question.

  Competent – Exercise 2

  Express the Big Idea. The purpose of this exercise is to practice clearly expressing a Big Idea that captures the attention of investors. Attendees practice expressing their Big Idea with these 3 Elements: Unfair advantage, disruption and big profits.

  Connection-building – Exercise 3

  Positive Small Talk. The purpose of this exercise is to practice asking a question that does not feel invasive to the investor—upon first meeting. An invasive question can sound like “What are you looking for in an investment?” That is putting the inves
tor “on the spot.” Instead, we ask, when appropriate, a gentle question in a friendly tone: “So, how did you get into investing?”

  Conflict-skilled – Exercise 4

  Positive Story about Conflict. The purpose of this exercise is to have the workshop attendee practice describing how he or she led a team to a positive resolution of a conflict-laden situation. The pattern is to tell a Positive Story with these elements: “My point is that I’m good at leading people through a conflict situation. For example, the conflict was ______, and I led the positive resolution by doing ____. And the great results were _____.” The extraordinary leader ably guides team members through conflict because conflict can often lead to better solutions, better products and better engagement with clients.

  Coachable – Exercise 5

  “Mentor Guided Me” Story. The purpose of this exercise is to help the workshop attendee form and express a story that demonstrates that the person responds well to coaching, takes direction and achieves excellent results. This dispels the investor’s concern that the startup leader may be too ego-centered to face reality and learn from others. The pattern is to say something like: “One of my mentors guided me with ______. And when I implemented what they suggested, the great result was ____. My point is: I make certain that I am coachable.”

  * * * * * *

  Special Notes about Follow-up:

  Be brief.

  Respond quickly and be consistent.

  Devote effort to fulfill what the person has already communicated as important to them.

  Identify what their workstyle preferences are. By this I mean, find out if they prefer email, text, Skype or in-person meetings and other such details.

  To make this memorable, I developed the W.I.N. process:

  W – work their workstyle preferences

  I – integrate investor’s priorities

  N – nurture investor’s impressions

  Work their workstyle preferences

  It’s vital for you to identify as soon as possible the investor’s workstyle preferences. You avoid crossing a line and losing the investor. For example, you might encounter an investor who is trying to save his or her marriage and has decided that the hours between 6 pm and 8 pm are only for family.

  If you call between the hours of 6 and 8, you may be on the receiving end of the investor’s intense anger—even if you hadn’t received this information earlier.

  Additionally, related to workstyle preferences: Some people prefer email and texting. Others prefer in-person meetings. Some people reserve weekends for their families.

  You can get information about an investor’s workstyle preferences by asking something like: “When I work with someone, I always like to find out what their workstyle preferences are. And in this way things go smoothly. I don’t make an error and call you at the wrong time. Or if you prefer email, I focus on providing what information you need in the way you prefer to receive it.”

  Integrate investor’s priorities

  It’s vital for you to make your communications focused on the investor’s priorities. Anything else will be noise or pollution to the investor. On the subconscious mind level, the investor is likely to consider you an amateur. Once that impression takes root, you have a huge problem. The way to get around this is to be sure to ask questions that often take the form of ”What’s most important to you about...?”

  Nurture investor’s impressions

  The more you know about the investor’s impressions of you, your offering and other pertinent details, you are better able to nurture the relationship.

  You can ask questions like:

  What do you like the most about this investment opportunity?

  What do you like the most about investing with me?

  I like to learn. If you had a moment to coach me, what would you bring to my attention? [You create the impression that you are coachable. A classic idea is: “Ask for funding and you get advice. Ask for advice and you get funding.”]

  Now, Henry Wong reveals the essentials of making a great pitch.

  Interview with Henry Wong

  Tom: When somebody makes a pitch what is crucial for them to do?

  Henry: The pitch has to be clear, precise, and self-explanatory in 25 words. Sometimes, at a cocktail party, you walk up to somebody who may be the CEO or a major partner of a venture capital firm. You say, “I have this project.”

  The CEO says, “What do you got?”

  You have 60 seconds for your spiel, and you have to exactly describe what you do. Clear, precise and crisp.

  Tom: What is the big mistake that somebody, who is delivering a pitch, must avoid?

  Henry: They don’t know what they want. They don’t know what they have discovered. They are just not sure about themselves. When one is not sure of oneself, it shows in the language and the delivery of the verbal communication. If you don’t know what the hell you’re doing, I don’t want to fund you. You’re kidding me, right?

  Tom: Knowing what you know now, what would you have done differently in business?

  Henry: I would have been like a machine. If a guy does not fit the department, I would have fired him. Learn how to fire people. Not as bad as Steve Jobs. But learn how to cut the cancer cells away from your company. For example, I was the manager of a bullpen of nine people. They were different types of telemarketers who handled the sales of software.

  One guy in the bullpen was so negative. Instead of taking phone calls and making phone calls, he would just walk around and talk to the other people. He was negative—complain, complain, complain. As a manager, I was a good guy. I gave him a verbal warning and two written warnings. I asked, “Do you want to work at this company?” And I didn’t fire him. I was so nice. I followed procedure, but sometimes you cannot let the procedure run you. You have to fire the bad apple. It’s like the old phrase: One bad apple will spoil the bunch.

  Professor Henry H. Wong has been a prolific and successful venture investor, serial entrepreneur, and Stanford University Mentor in Silicon Valley during the last 38 years.

  After working for four Fortune 100 corporations, Henry channeled his entrepreneurial spirit to go and “change the world.”

  Frustrated with existing sloppy edge technologies, Henry founded, seed-funded, and exited five successful startups, including SS8 Networks (ADC Telecom), IP Communications (Nokia), XaQti Semiconductor (Vitesse), CNet Technology (IPO), and Combinet (Cisco). He was always the founder, chairman, first president, and CEO. Professor Henry has the successful experience in selling his startup Combinet to Cisco for US$165M in 1995 money valuation.

  Realizing that “money makes the world go round,” Henry founded Diamond TechVentures, a Trans Pacific Venture Investment firm. In parallel, he was also the venture partner to Guy Kawasaki’s Garage Technology Ventures, and before that, Crystal Ventures, a Taiwan President Lee’s $250M VC Fund.

  With the fast growth in Silicon Valley and the ever-changing landscape of technological advancement, a different ecosystem is needed to accommodate growth and accelerate prosperity. To address this, Henry founded TechLAB, an Innovation Center, where he coined the term, “Find it, Fix it & Fund it.” Pre-qualified startups or companies that Henry continues to help are incubated inside this accelerator under a secured environment, where the filing of new patentable technologies is done on-site.

  The Singapore government’s SPRING agency funded Henry’s iStartUP program to train Singapore entrepreneurs. The Hong Kong government honored Henry as the “Game Changer” returnees with the Home Coming Tipping Point award. The IT Minister Choi Yanghee of the Korean government recognizes Henry’s continuous contribution to their Knowledge Innovation Center (KIC) and named him an Advisor to South Korea.

  Henry holds a Business degree from the University of Utah, an MBA in Telecom Management from Golden Gate University. He is an MBA Professor in Sofia University, and is a Mentor in Stanford University. He was a 2002 finalist for the Ernst & Young “Entrepreneur of the Year Award.” Henry
is a frequent Keynote Speaker, Panel Discussion contributor and a Business Plan Competition Judge.

  VIDEO on Professor Henry Wong’s Stanford University Lecture: https://bit.ly/2MJhqCT

  Professor Henry H. Wong is available as a Keynote Speaker, Business Plan Competition Judge or member of a Panel.

  Subject to availability, Professor Wong can provide an in-house training on “From Garage to IPO” customized for Incubator, accelerator, science park, corporate strategic planning department and government agencies. For further details, please email Henry@Garage.com

  Or call +1-408-234-6810

  Power Principle: Create trust by using the 5 C’s: Confident, Competent, Connection-building, Conflicts-killed and Coachable.

  Power Questions: How might you fail to give a strong impression that you excel at the 5 C’s: Confident, Competent, Connection-building, Conflicts-killed and Coachable? Which people do you trust to help you with your rehearsals? Will you get a coach?

  Get Access to Free Videos to Take Your Skills to a Higher Level

  Go to GetTheBigYES.com/YourAdvantage

  Section Two

  How do I create the slide deck that

  gains meetings with investors?

  Countermeasure: Create a slide deck that gains an Immediate Yes with the first slide and utilize the investors’ rapid cognition.