I exchanged some blog comments with Tereza yesterday. She's starting a web company and is raising angel money. She said she did some phone pitches against her better judgement and they didn't work out. I advised her not to do them anymore.
Here's my thing about phone pitches. They aren't very effective. I hate taking them and almost never do. I don't think they allow the entrepreneur to show themselves very well which is the most important thing of all.
And it is so easy to say no over the phone. There's no real human connection. It's easy to pay half attention or less on the phone. It's easy to fake that you are listening when you are not.
I admit that I am really bad on the phone. I always have been. It's not a medium that I like very much. So I am probably worse than the average investor. But even so, I think doing phone pitches is a mistake and you should avoid doing them.
I do think a short phone call introducing the opportunity at a very high level and making the case for an in person pitch is an important thing to do. You can accomplish that in a few minutes or less. It's basically an elevator pitch. But don't agree to do the whole pitch on the phone. Ask the investor make time for you in person to do that. That will determine if they have sufficient interest for you to invest your time with them.
And what about a video chat on skype or another similar service? I do think a video chat is sufficiently better than a phone call to make it a semi-viable alternative. If a plane ride is required to see an investor, then a skype/video chat is a decent first step. But again, you should do it with the objective of getting an in person meeting.
But if you can visit the investor in person without getting on a plane, I think you should always opt for that over a conversation over the phone or skype. There really is nothing like the in person, face to face meeting when it comes to fundraising or any kind of high level sales effort.
Fundraising is such a hard thing to do, particularly for first time entrepreneurs without a track record and an investor following. Don't make it harder by putting a wire between you and the investor.
This goes right along with your “marriage” analogy. Only the ugly (or desperate) want/accept their first date taking place over the phone. Be there.
great way to think about it andybtw – left this comment reply on business insider
btw— Added “knowingly, willfully, and defiantly” to the copyrightinfringement language….
I’ve missed that. What is it? That notice?
Sleeping together based on a single phone call….CHEAP! Blech!
I think this is true for most important decisions that need some kind of commitment. Email/phone/skype are great to work or mantain contact, but nothing beats face-to-face to start things properly.
well thanx man, such a big advice for all your collegues who don’t wanna loose time (they say)
My own personal experience has seen success in both (in person and on phone), but those successes on the phone were a direct result of a very important referral from a person that was pitched in person.Any communication that could lead to a future relationship is so much more effective/rewarding when done in person. But as a starving entrepreneur, there is just too much green to cover (geographically and monetarily) in meeting face to face with a potential strategic investor and thus our only choice is phone/video/web. [Any advice on great phone/video/web strategies?]As an additional point, few things are more frustrating for an entrepreneur than to be told ‘not interested’ without getting the opportunity to dialogue and/or show your product, especially when an intro was made via referral.As an early entrepreneur, you know you have to have your A-Game ready and your strongest arsenal mobilized to make an impression that sticks. That certainly requires some extended means of communication, preferably in person.
I actually did secure some investors by phone. But they know me well. We have worked together and I have made them money in the past and pulled off some stuff that was considered ‘impossible’.They had the info to envision me being brilliant, lovely and charming on the other end of the line.That’s totally different from someone who’s never met you before (even if it is a “second meeting” inside a firm. They can say No but an enthusiastic Yes is impossible).
that’s a great point Tereza. if the investor knows you well, the phone can work. the most important thing, a relationship, has already been established
well then congrats Tereza!
I spent a relative small-fortune (that I could ill-afford) in time/travel scouring the UK when trying to get funding for my startup/business plan (which eventually became ensembli.com).It tests ones faith in one’s own beliefs, for sure. Also, there’s no substitute for face-to-face feedback (good and bad) to help develop iterations of one’s idea.Good luck, Tereza!(Interested to learn more about the project, if in a position to share information at this stage).
You investing, Carl?Do we know each other well enough to do an overseas Skype?:-)
Sadly my own startup has – ahem – far from (as yet?!) enabled me to become an, erm, ‘enabler’ myself, Tereza :-(Just interested! 🙂
Carl when the time is right I will love to invite you into the service.For reasons I can’t explain here I can’t do that yet, but you’re on the list!Thanks for the great mojo.
One tactic I’d recommend for Tereza and others getting stuck in phone pitches, is to pull out the “I’m actually going to be in town next week, how about we meet in person then?” line.If the person bites, great, if not, it would have been a waste of a pitch.And, of course, once you have them agree to the in-person, scramble to fill the rest of your time finding others to pitch as well.
Yes that’s a good one. I’ve used that in the past for biz dev and it works well. Great excuse to fill your calendar.This one was based on a strong referral and totally well-intentioned on behalf of all parties so I didn’t think to say no. Should have.Every minute is precious when you’re trying to get a product out the door. So is keeping your mojo positive. Prequalify ruthlessly to not waste your time and keep your mojo up.
the keeping mojo positive is a great pointdowner meetings are not helpful
My dad sells refurbed Polycoms. One of their biggest uses is for businesses is because you call skype semi-viable. The screen is small and there is degradation.That, and apparently, of all things, very formalize dating, for the exact same reason.Still, I noticed two things: They are sold by a real person, and they are a try it item. Like all things, date one you really want to get a feel you can trust the person and the item. Even for an item that is meant to do the replacement for large amounts of in business dating- which it does do for a significant amount of people (it’s a remote control, a big camera, and a nice tv, I mean…for a lot of people, this is simple?)
In a world where we are all connected almost all the time, and in real-time, it is still important to have face time especially in making new connections and making new deals. Going with andyswan’s analogy, iPhone’s Facetime is not a good tool for a first-time date, but an awesome tool for people in a relationship to stay connected.
+1 ..and furthermore if the investor can’t be bothered to meet you they’re probably just fishing for info in anycase. All entirely sound advice IMHO.
Love this post Fred, as always. Maybe start with a phone call, then a video Skype call, then an in person meeting if it makes sense at that point. Seems like too many in person unproductive meetings happen without them needing to take place.
I can’t pay attention when I’m on a phone at my desk in front of a computer, so I use a conf phone, stand up or pace the room, so that I am completely focused on the phone call. 🙂
i do that tooi grab my wireless phone and stare out the window when i am on the phoneit helps but still is nothing like an in person meeting
Agree 100% that in-person is way more effective.I haven’t yet been involvedwith raising money but have seen the difference between phone and in-personduring sales experiences.
We just made an investment into a company that we had started using the product for a few weeks ago. We were developing some new applications and their technology helped fit a gap we had.The founder came down to our office to help with some dev we were doing – he basically hung out here for 3 days as we built the application, with him. During that time we got to know him and the product – and loved it – and made an investment offer his last day, we really wanted to be involved with helping them grow.Admittedly this is an outlier example, but the face time in this case created an opportunity for the company and us that otherwise might not have have existed.
so does that explain the motivation behind tmw night’s hackathon at Betaworks, Andy?http://hackabit.eventbrite….
Back in the good ole days – I closed a couple of £50k angel investments on the phone without any face-2-face meetings. They were stragglers of a larger angel syndicate so the DD had already been done by the others – they just wanted a little one-on-one with the CEO.Probably wouldn’t have invested if they had met me face-2-face :-)Any investors here invest solely on the back of (multiple/in-depth) phone calls?
Fred you totally blew the cover off my stealth fundraising process. AND you stole the thunder I was procrastinating on delivering to my ~40 faithful Tumblog readers.In my defense I was doing meetings and phone on a very narrow basis, only on strong personal referrals. You can’t kiss a frog by phone!To all of you potential princes out there: if want to give me a test run with a face to face meeting, I’d be happy to. It’s really easy. Take the 50-minute Metro-North train to Stamford (express!) and extra 30-minute drive. I think you’ll find it lovely up here. And I make a lovely iced tea.Alternatively, if you have no competitive investments, are really nice, and have a personal connection or referral to me, I’ll find a way to squeeze a meeting in at your office. 🙂
We’re all very excited to see what you’re doing! Keep us posted.
good luck Tereza
Knock em dead Tereza.As much as I could use funding, I need something fundable first. It took a few months for that to really sync in. A pitch is one thing, a user base and traction are another. At VM we know we can discover a product and develop it pre-funding.
“You can’t kiss a frog by phone!”Someone needs to orchestrate a comment thread between you, JLM, and Andy Swan with only 1 rule: you must answer each other with pithy phrases like this. I would subscribe to this thread.Good luck with the fund-raising!
Like they say in Texas — but only if you have a lisp — don’t pith on me and tell me it’s raining!
i hope you’ll have more than 40 tumblr readers now Terezaand i hope you get the funds raised to get your business launched
we will launch no matter what. wild horses will not keep that from happening.our capital is to get the product past MVP and build in features that support/propel viral adoption. hitting a certain number means we hire the developers full-time. until then, we move slow bc it’s nights & weekends. it’s always slower when people have day jobs.
Fundraising is about people. There’s no substitute for face-2-face.The good news is that today, we can get close to folks through mediums like this one, get to know someone well (I’ve made good friends through this blog) and make that face-2-face a logical next step where email or cold call doesn’t really work.I thank a few blog communities for letting me meet new folks in a personal way so that…hopefully…I never have to make a cold call again ;)Good luck Tereza!
Making any sort of cold telesales pitch is pretty tough beyond about $100 in value, which then makes it a numbers game . Even getting a follow up call for a warm lead can be tough.Face to face all the way, more opportunity to upsell.——————————-comment posted via AVC.com 😉
love the signature!
….just need to get Daniel to put it as a feature on the Disqus roadmap now.
It is. He read the entire thread and is mulling over how to do it right
Yeek, what timing for this post, Fred. I have a call Thursday w/ a local VC who was introduced via email by a venture attorney we both know. The VC investigated what we’re doing and requested the call – of course I’ll take it. I was not planning to start fundraising until I had more market proof.I’ve been debating whether to send my work-in-progress pitch. I’m leaning even more to the side of not doing so after reading this. Would you concur on that tack?
They’re researching the market and you’re a source of info.My 2 cents (based not on a track record of success but just observation) is that it’s a VC’s job to meet with you, if you’re a remotely serious prospect.Check if they have a competitive investment before you open your kimono. At the stage you’re at it is likely not defensible so why expose yourself?If it must be a call, tell them you have 5 minutes to give them a high-level view and have to run to another critical meeting. And that you’d be happy to the schedule an in-person meeting.Put on an egg timer. When if rings, get the hell off the phone. (this advice comes from the dating book, “The Rules for Girls”)Let them give you the courtesy of face time.
In all fairness, you can’t get the kind of deal flow necessary unless you do first phone calls. It’s also hard to tell whether a company meets your criteria and is at that point in time worth a meeting based purely on information you ascertain from, say, the internet. A partial pitch or a quick debrief is probably the best compromise.By the way, I do tons of calls, and it’s never to sneakily obtain information about a competitor. Seriously, I don’t think this is the motivation.
For a quick initial screen, I get it. I do think the exec summ + an personal intro + that quick screen should be plenty, for both sides.But a second meeting, which this was, should be in person, don’t you think?
take the call but start out by explaining that what you really want is the opportunity to pitch face to face so you are going to give them the highlights over the phone in hopes that will get you the meeting you want
Agree. Selling over the phone is hard enough. Getting funded? Forget it.
What do you all think of doing something like this?I’m trying to raise capital for an online chat and community site with video and voice capabilities.I’m in Iowa so any face to face with anyone other than a cow results in a costly plane trip.I had thought of trying to initiate a meeting by creating a private chat room for the parties involved and holding the meeting on site. This way when I give the pitch they are sure to be familiar with the quick and simple registration process, at least have seen the profile system first hand, and can see the capabilities of the chat rooms as I’m giving the pitch. I think it would make the pitch much more real instead of just an abstract thing that they haven’t experienced first hand. Plus we could simply bump to one of the public chat rooms to see how actual users are using it and how they like it which is really the thing that matters.What I worry about in trying to get a meeting this way is from a salesman’s point of view trying to get anyone to do something new no matter how simple and painless it is to try and close a deal adds just one more hurdle in getting that magic yes. Even though it takes just a few seconds to register and go into the chat room, in the potential investor’s mind it seems like a big hassle to go through.What are your thoughts on this idea?
i like it. but keep the virtual meeting short. just long enough for them to see your product in action and get the high level pitch. at some point you are going to have to visit the investor face to face to close the deal.
I think you may have already made your first mistake in your product – requiring participants to register. You want to remove as much friction as possible in exposing people to your service and *then* try and capture them, firstly as free registered users and then as paying customers if you’re going the freemium route.Tinychat does this well. I can create a room/community, get a link and share it. Participants just click and they’re engaged. If they liked the experience and/or want to create their own conversations, then they need a simple registration.
In the direction this site has taken there is really no way to not register to use it, what makes this site better than most of the competition in my opinion is it’s a social community with a fully loaded profile system built around the chat rooms unlike most other sites which is either the exact opposite or has no profiles or other features other than a simple text chat at all. Imagine Facebook or Myspace full of guest1002848750283 users instead of actual registered users, with no personal information, photos, videos, blog posts, or wall comments, it would be horrible and there would be no real point in using it.On top of that the registration also gives more control as an administrator to keep out spammers and people that would misuse the service which is a very serious problem with free community sites like this and has in fact been the down fall of several big players in the past.I could very easily allow guests along side regular registered users but again I think it really degrades the overall experience for both the registered members and the guests as they are not getting the full experience they would as registered users. And really all the registration amounts to is throwing some basic information up for their profile and to allow other members to find them through search. It takes probably 30 seconds and they’re in, I don’t force a confirmation or anything like that at this point which I think helps make it more painless.
I’ll also mention that the site also allows login with a persons Facebook credentials which will then import their information and profile photo over from their Facebook account if a person really doesn’t want to go through the regular registration.
It works both ways. Last October (so that would be October 2009) I met face-to-face with an ‘investor’ who had never heard of Twitter. If we’d been on the phone or Skype I’m sure some ‘technical hitch’ would have magically curtailed our conversation. Since I was physically there, I had to go through the useless motions anyway.That said, you’re right. No-one ever closed a real deal without a face-to-face meeting.
I agree 1000% on this. Flying around the country can be a huge expense and a big pain but it is truly the best way to raise capital. My company is located in the Midwest so I often have to fly to Boston, NYC, or the Bay Area for pitch meetings. There is no way around it. I try to schedule them together as much as possible but VCs are tough to schedule so I need to be flexible.My wife, who is home with 2 little ones, always wants me to try to arrange more phone or video conference calls, but I keep insisting to her that in person, especially for pitching, is the best way to go. Now I have some ammunition. Thanks!
Coincidentally, we were just talking about this yesterday in our partnership. I agree 100% – if you want to do yourself right, phone pitches should be solely for quick overview and qualifying an investor in or out and if in, agreeing to a face to face. So much of what early stage investors like to see is the talent and passion of the entrepreneur, and that does not come across on the phone, or skype. As an addendum, if you are raising capital from a multiple office venture capital firm and they want to pipe in some of their other partners via videoconference, do your best to resist that set up as the same issue applies and suddenly you will have all the remote office partners wondering why they should move forward with your company.
That’s correct. The multi-office, a “second meeting”. There were very logical reasons to do it the way it was suggested. Which is why I didn’t think to say no.Again, everyone meant well. But lesson learned.
thanks for sharing your thoughts Chipyour point about the “mulit office venture capital firm” is interestingi don’t believe in that model. i suspect you may agree given your setup.
After all, 93 percent of communication is nonverbal.
If I am investing then I like to know everything about the company, founders and employees etc. Heck, I want to know what toothpaste you are using. I think meeting on either premises is essential. A minimum 5 meetings before you can tell one way or other. I guess that’s why I am not a VC or angel investor. Probably it is my Indian-ness.I believe angel investing is like a love affair. Only if it is a love affair, it gives you strength to last through the difficult first phase. On the positive side, it gives the same high (both sides). All the angel investors I know are in love – Fred included. I can tell – I don’t know if they can.So I think direct one-on-one is better than phone pitch. Best of luck Tereza. You already have some positive vibes going for you.
guilty.never call a VC or potential angel on a monday morning in the middle of a packed week involving a lawsuit.of course you don’t know what’s going on at the other side of the wire, it could be that you’re incredibly lucky and the man has just hit a cashpot exit, or a pay day IPO in one hole…but chances are slim, so … don’t.
Phone call is like swirling the wine and smelling it… the real thing is getting physical … gulping it down the throat and feeling the spirit getting through the alimentary canal then … say “hmmmm” … 🙂 .
“But don’t agree to do the whole pitch on the phone.” Probably hard for the founder to tell the investor “Look, I think we need to meet to take this further.”I am also reminded of the phone screen in the hiring process. It probably works best as a threshold screen but HR folks often take it further than that. (I am not looking for a job but I hear about this stuff from my brother in NY who is looking.)
Reading through the comments, it seems there’s near-universal support for in-person pitching.My startup is about to seek out a few rock-star advisors. I’d love to pitch them in person, but sadly this is impossible because I’m in India for the next five months.If you’re just asking for advising, as opposed to funding, will that be possible without meeting in-person?My strategy so far has been to create a customized deck for each person, host it at a special URL on our website, and direct them there to see the slides.Is this strategy doomed to fail?
I thought it does not matter whether it is phone or face to face, the two main criteria used by anyone wanting to fund your venture are 1. You have a track record and 2 You know someone specifically who will invest in your venture.From all my observations Venture Capitalists including USV are probably the most risk averse folks out there. They predominantly invest in people and it matters to know the right folks unless of course you have a product that has some revenues or traction already.So if you are “foursquare” then you could see a pitch being accepted on the phone and the VC paying attention.In the end it is who is on the other end who is taliing that makes the VC decide if they should pay attention or not, many a time I am guessing they take the call/meeting cuz they were asked to do so by a close friend and they are being nice and they and their friend can say at least they listened to a pitch.Good luck Tereza cuz a lot of that is also needed to get your product off the ground….
Jeff Clavier once tweeted about this gentleman who left a phone pitch as a voice message while driving on his top down on a windy road (probably somewhere along the windy Pacific Coastal Highway.. need to verify that again). I myself could imagine not being able to audibly understand the proposition; let alone if it lasted 10 minutes or so. Nonetheless, making a phone pitch while driving down the road (and with the chorus of nature and elements) may not really sound that personable.
Well said. The biggest blind spot in phone pitching is that you can’t see and read body language which is key for adjusting and reaching properly.
Phone pitches do not work well with me, so I do not impose a phone pitch on anyone. When someone is trying to pitch me on the phone, usually the pitch is not invited, which makes the pitch even worse.
Wish I had this post a month ago. Wasted some time myself pitching over the phone.
I wrote up a related blog post called You can’t kiss a frog by phone.http://terezan.tumblr.com/p…
I had the opposite and equally waste oh time problem – VCs who met with me for months having the same conversation over and over again with nothing really moving forward. I should have sent them an invoice for my marketing consulting fees because in retrospect, (other than my sparkling personality) they were meeting me as much for my perspective on digital, social networking, where the customer marketing place was going etc. All things I get paid a lot of money in my non-start up life to talk about.The process of raising funds is such an incredibly subtle art. Sometimes it’s hard to know the difference between the opportunity cost and an opportunity lost.