The Most Dreaded Question an Investor Asks
“So, what can I do to help you?”
This question, generally, isn’t an amazing sign. It usually comes when the investor doesn’t fully understand you, your business or your needs. It can also comes when the investor decides they aren’t interested in investing in you at this point in time.
“Uhh, write me a damn check!”
Bad response.
The onus is on you as a founder/CEO to understand your business better than anyone else and have an intimate understanding of what you need to progress your company to the next level. So, step 1: share the super honest reality of your business with other entrepreneurs and experienced people you trust so they can help you anticipate what you don’t already know. We all have blind spots. Admit the facts and find yours as quickly as possible.
Step 2: understand why they are asking you this question. Have they already passed on the investment? Is this just the first meeting? “What can I do to help you?” is both an authentic effort to help and a test to see how good you are leveraging resources that are available to you.
Matching Your Ask With Your Audience
The challenge for you now is asking the right person for the right thing. Like all normal people, investors have past experiences, biases and skill sets that make them uniquely qualified to address some challenges and uniquely unqualified to address others. It’s your job, as the help-seeker, to ask the right person for the right thing.
If you ask the right person for the wrong thing, you might get a response like “Hmm. That’s an interesting challenge. Let me think about it and get back to you.”…or…“I see. Have you spoken with [obvious, inaccessible startup celebrity who probably has the exact answer you’re looking for]?” Pro tip: If you do get the second question, ask for an introduction.
If you ask the wrong person for the right thing, you might get a response like “Yup. I know exactly how to solve that. Just do these three things.” Ultimately the wrong person is likely going to be overconfident in their oddly simple, hand-wavy answer. “Top of the funnel? Totally get it. Just launch an inbound marketing program so people start reading your content. That should do it.” Yea. Thanks. Pro tip: these people can be amazing sources of introductions. Acknowledge their advice and ask if they were in your shoes, who’s guidance they would trust on this topic. Then ask for intro to that person.
If you ask the right person the right thing, you might get a response like “Interesting. Why is this your biggest challenge? What have you done thus far to try and solve it? What has/hasn’t worked?” Then, after getting your answers, they will likely pause and share anecdotes they’ve seen or heard from other instances of people who dealt with similar situations. Why is this better? Your problem is uniquely yours. You have unique circumstances — timing, people, product maturity, market maturity, skill set, knowledge and cash on hand. There’s quite literally no obvious answer to your problem because there is quite literally never a time that your exact problem has been solved. Instead, you should draw inspiration from pieces of solutions from other problems that have similarities to yours. The right person understands this and will help you think it through. Pro tip: asking the right person the right thing is uncommon and very special. Get good at learning what someone is uniquely qualified to think about so you can do this more often.
To All You Entrepreneurs
Know. Your. Business. Be paranoid that you don’t know enough. Wonder what you don’t know. It is guaranteed there is information you don’t know that you don’t know. Obsess relentlessly on figuring those things out as quickly as possible. Ask other founders — they are dying to spare you their misery. Ask customer s— they are dying to help you be better for them. Pretend to be a customer to your competitors to see what they are doing — they are dying to sell to anyone who will listen. Pro tip: Ask a lot. Listen more.
Know. Your. Audience. Please prepare for meetings. What has this person invested in in the past? What has this person worked on in the past? What have other people told you about this person? Write these things down — it will help you remember this information and reflect on it. Create a list of topics/questions that you think this person can help you with. Reflect on it. Pro tip: ask other people in your network if they’ve met someone you’re preparing for and ask what they were most helpful with.
To All You Investors
You’re busy. We get it. But, we’re starving. We walk around self-conscious, wondering why we can’t get everyone to say yes. We’re underpaid, overworked and goddamned proud of it. We’ve never loved something as much as this and can’t understand why everyone doesn’t love it as much as we do. We’re determined to win and want you to want to win with us.
So when you ask us, “what can I do to help?” It’s almost insulting. There’s SO much you can do to help. Who do you know? Can you intro me to that one person I’ve been trying to get in touch with for 2 years? Can you write me a $2m check so I can pay my insanely awesome and dedicated staff who are bleeding in the trenches with me? Can you put my mind at ease so I can sleep better at night? Can you help me think through my 12 month plan and see if it makes any sense?
A proposal: change the question.
“What’s your biggest challenge?”
It’s not your job to help us run our business. It’s your job to invest in companies that are going to make money and generate a return on your investment. But it’s our job to build those companies that make money for everyone. So, instead of asking how you can help — a question to which there are infinite answers — ask what the most difficult challenge is right now. This does two powerful things:
- Forces the entrepreneur to rank their problems from the perspective of what they are least comfortable solving.
- Allows you to be instantaneously helpful and powerful if you can help solve that problem or know someone who can. This spreads in the community. Investors develop reputations for being helpful among entrepreneurs and we talk. A lot.
To all those investors who asked me my biggest challenge: thank you for making me think harder. To all those investors who were particularly helpful: what goes around comes around.
To all those entrepreneurs who selflessly gave me amazing advice: I promise to pay it forward. To all those experienced people who dedicated their time and energy to helping me pursue my dreams: you fuel the fire.
Go get ‘em.
If you liked this post, please hit the green heart below and recommend it so other people can discover it, too. Thanks!
