No Unforced Errors: A Guide to First-Meeting Discipline
Across 10,000+ meetings, one pattern repeats: eliminating unforced errors improves win-rates. Read about what to avoid in the first of this series on achieving capital alignment.
In fundraising, you do not get infinite chances. Investors are looking for any excuse to say “pass.” Investors receive thousands of inbound requests from funds looking to raise capital almost daily and might only have room to add four new funds per quarter.
Congratulations if you succeed in grabbing the attention of an investor, let alone get them to agree to meet! Now comes the next test: no unforced errors in your first meeting. Similar to tennis, unforced errors reduce the chance of getting the result you want.
You want to make the right impression and engage the investor sufficiently to want to learn more. You do not want to make a classic off-putting mistake that sours an investor’s opinion of you or your firm/fund.
First Impressions Matter
On my website you will find a video of a glass of clear water. With one drop of ink, the entire contents change color. While you can separate the ink from the water, it takes real effort . . . just like it does to change a bad first impression.
In prime marketing times, I have averaged five pitches a day. At the height of COVID, that number grew to nine. Multiply that across decades in the business, and I have long since cleared the 10,000-hour threshold Malcom Gladwell popularized as the marker of expertise.
My thoughts on first meeting pitfalls based on this experience follow.
Truth serum: Once an investor forms a negative opinion of you or your fund, it usually stays that way.
A sharp, disciplined fundraising strategy for asset managers starts even before the first pitch.
Be mindful in the elevator or lobby of what you discuss and how you approach security/the reception area; you never know who’s listening and watching. Meeting location, attire, attendees, even how you confirm a meeting and prep (or not) all send signals. Each detail shapes an investor’s first impression and offers a chance to avoid unforced errors.
The same goes for your pitch: it sets the stage for lasting capital alignment.
Unforced Errors: First Pitch Pitfalls
Most pitches fail because they drone on, overuse jargon and lack structure. Use an investor’s time wisely or risk losing both their attention and their capital.
Managers make seemingly obvious unforced errors when pitching more often than one might expect. These mistakes often leave investors with poor impressions or, at the very least, a lack of enthusiasm to diligence your firm and fund further.
Avoiding these fundraising pitfalls can improve meeting hit-rates.
Going in Blind: Do your homework on the investor upfront.
Not Listening: Answer the question an investor asks, not the one you want to answer.
Assuming Too Much: Do not jump straight to the heart of your investment edge without framing what your strategy actually does upfront.
Overloading Detail: Answer succinctly and leave room for a follow-on question or engagement.
No Structure: Have an agenda: problem, approach, payoff.
Lying: Investors take notes; they fact-check. Do not insult them.
Tasmanian Devil Effect: Do not ramble. Articulate your investment case clearly. Do not leave an investor wondering, “Huh?”
Not Speaking the Investor’s Language: Know your audience. Avoid acronyms and overly complicated explanations. Use plain English.
Ignoring Time Constraints: Start and end on time while leaving space for Q&A.
The Real Goal: Earn the Right to Meet Again
In 2008, I experienced the thrill of having an investor write a check on the spot at the end of our first meeting. That has not happened since. Today, investors require a series of meetings and thorough diligence before allocating capital. Investors do not expect you to cover everything in one shot and nor could you.
You want to demonstrate credibility and show respect initially. Your goal is simple: get to the next meeting. Make an impression that leaves them optimistic about your strategy and wanting to do more work.
From the first meeting, to email exchanges, through the diligence process to close, you continue to form an impression and build trust (or not).
Over time you should aim to build mutual respect and trust, the ultimate evidence of capital alignment.
Think of it as a tennis match: point by point, game by game, set by set. Or in boxing terms, one step (see what I did there?) at a time, one punch at a time, one round at a time.
Preview of Next Article: Core Ingredients of a Strong Pitch
Now you know what to avoid when meeting. How about detailing what “to do” to make a good impression? Every first meeting should answer these questions:
Why You? Show credibility and differentiation.
Why Now? Provide a proof point that compels engagement.
What Else? Clarify next steps and begin building trust.
I will dive deeper into each of these in the next article. For now, keep them in mind as the backbone of an effective pitch.
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Nice one Jamie - keep ‘em coming!