Tech startup founders often make the mistake of trying to convince an investor with their pitch,
Y Combinator founder Paul Graham writes on his blog. Instead, it’s better to let the startup speak for itself.
Graham, a longtime Silicon Valley investor who has backed startups like Dropbox and Airbnb, says the first step is to understand why your startup is worth investing in. Then you just need to explain that to investors.
Here’s how to at least seem like you’ll be a big success and get investors to back your company, according to Graham:
- Formidable founders (those who seem like they’ll get what they want). This is the most important ingredient of the equation because investors make snap judgments about you when they meet you. Within the first few minutes, Graham says, investors typically decide if you’re a winner or a loser. Once they form that opinion, it’s hard to change.
- Truth. In order to get respect and impress investors, you need to tell the truth. You also sound more confident when you’re telling the truth. It’s easier to convince an investor to back your company if you yourself are convinced it’s worth investing in.
- Market: Prove that you’re a good bet to investors by showing a “plausible path to owning a big piece of a big market.”
- Rejection. If you’ve been fundraising for a while but haven’t gotten anyone to invest yet, it can be even hard. Simply be candid about what made investors hesitant about you.
- Different: Convince investors that you’re different from everyone else. Show them that you have a new approach to the problem.