The worst thing an entrepreneur can do (particularly when raising funds) is to appear needy. The moment someone appears desperate, he triggers our prehistoric “fight or flight” instinct and any investor will just turn away from the deal.
It is obviously easier said than done — when you‘re standing with the back to the wall, when you know you won’t make payroll this month and your runway is measured in days, you might very well be excused for feeling desperate.
But the moment you let this shine through to your investor, I can guarantee you that they will walk away from the deal. Nobody pours money into a sinking ship.
I encountered this very situation with my first company. We were running out of cash, we tried to sell the company and we had a few interested buyers lined up. In the meeting with the most promising buyer I screwed up: I needed to make this deal work, otherwise we would be about two weeks from closing shop and losing everything. In the pitch, I came across as needy and desperate. Lo and behold the buyer, who previously was very interested, bolted. They couldn’t leave the negotiation table fast enough — as they saw the company for what I presented it: On life-support. After this encounter I pretty much gave up on selling the company and took that attitude into my next meeting with another potential buyer. I didn’t feel pressured to sell the company. I focussed on presenting all the great assets the company represented. And to my surprise — the buyer made an offer on the spot (which we took after some negotiation).
When you pitch — have a clear game plan. Know what the deal terms you want and need are. Then walk into the meeting and follow the mantra:
Want nothing. Focus only on things you do well.