You should be able to get a term sheet …
…. from any investor …
….. within 14-days.
I once got a million-dollar term sheet in 14-minutes, but I admit it was a weird situation, they even had a fridge full of books, check it out:
But no matter how weird the meeting room is, bottom line:
You should be able to get any investor from “initial meeting” to a term sheet in about 14-days.
I'm NOT talking about the FFF-style of investors.
It's easy to Sell your Dream to “FFF” because those people will literally buy ANYTHING from you:
- Fraternity Brothers (or sisters)
Good thing they will too, because that's the only place to raise “dream” capital to start a company.
But later, the dream turns into REALITY.
NOW you have revenue, customers, technology investments …
The “dream” is long gone, now you're EXECUTING THE PLAN.
And THE PLAN needs …
We're talking way more money than FFF have.
Now you need to sell big to check writers who can comfortably write million-dollar checks.
And probably you're going to be asking for more like $5M, even $10M.
….you're not going to THIS meeting in a hoodie.
………you won't be drinking a few beers “talking stuff over”
……………. and your jokes won't be laughed at.
What you ARE doing is pitching professional investors who are in the business of making money.
Friends, Family and Fraternity Bros are long gone.
The Professional Investors – I know hundreds of them – are actual sharks.
Their job is to get as much equity – and control – of your company as possible.
Oh trust me, I'm sure your pitch is “pretty good” and you can probably sell ice to Eskimos.
“Selling” is not where you are going to FAIL.
Failure will come after a few meetings … Failure comes while you're getting all smiles and high-fives and “let's do this thing.”
Failure comes … when you hear the magic six-word phrase that trips up most CEOs and Executives.
“Pending confirmatory due diligence, we’re in.”
I mean, how can due diligence go “wrong”?
Here’s what typically happens at this point…
1. During your pitch, investors have let you CLAIM all kinds of great achievements:
- We have The Best Management Team in The World
- Better product than the competition
- 90% Gross Margin
- Fat Pipeline of Monster Deals
At this point, you’re allowed to make pretty much any claim you want within reason…
2. But if it’s in your pitch deck – or you say it somewhere in your presentation –
The investors are going to expect to see proof those claims are real.
Let the diligence begin!
- Their analysts step in with questions about your competition
- Their technical people want to know how your tech works
- Their marketing people want to know your advertising costs
3. And THIS is where things go horribly wrong for most CEOs.
You, as management or CEO, can be so eager to answer all these investors' questions correctly.
…. You take the analyst calls.
…… you take the technology q&a call.
………… you even take a grilling from their 22-year-old marketing “geniuses”.
You THINK you're going to somehow impress investors by “going the extra mile” and personally respond to every request they have…
Maybe you've been here before?
Then you know what I'm going to say next:
Get ready to see a TERRIBLE term sheet that comes in at lower valuations with “POISON PILL” control provisions.
It’s all because you violated…
Rule #2: You must ONLY talk to and negotiate with the decision-maker.
No one else. ONLY the decision-maker.
Years ago, Crosslink Capital gave me a $30 million term sheet for one of my companies.
If you’ve never heard of Crosslink, it’s a multi-billion dollar fund that spans all the way from early stage, zero-revenue tech investments… to supporting their public investment deals.
While working with Crosslink, I became friends with one of the billionaire partners who told me, “Oren, this is how it works…”
- CFOs only talk to CFOs
- Marketing people only talk to Marketing people
- Analysts only talk to Analysts
As Founder, Leadership or CEO of your company, you should not be negotiating with analysts… marketing people… or even the CFO.
To do so lowers your status creates doubt and reduces the appeal of your deal.
Ultimately, institutional investors …
…. don’t want to see you running around scrambling, coding, teaching marketing and salespeople how to sell, rushing off to accounting, and dealing with other low-level day-to-day tasks.
You are the CEO or entrepreneur. Your job is raising money. So you need to have a full stack of other people to fill the other roles in your company.
If you have No Technical People or Analysts …
No Finance Manager …
No Sr. Marketing Person …
And no one but “You” can answer investor questions ….
You're not a company, and you don't get a $5M+ check.
You can find this out the hard way …. the lower your status is, by answering every analyst and technical question yourself …the worse your term sheets will get.
And if your potential investor finds a similar deal that appears to be a more stable company with a more dialed-in CEO…
Then he’s going to fund that deal (instead of yours) every day of the week.
Truth is, there are a hundred different ways you can screw up million-dollar deals.
Even those that appear to be in the bag.
That’s why I’ve decided to host this free one-hour training on May 4th, 2022 @ 10am PDT / 1pm EDT.
Register now to learn how to use the THREE RULES that close $5M+ deals from investors.
All you have to do is enter your email address on the page.
I’ll send you the link to the webinar about two hours before we go live.
Make sure to show up a few minutes early, and plan on staying until the very end.
I will not be sending out a replay.
You can only register here: