How listening helps during fundraising for your startup?
Listening is not just one of the most vital tasks, but tools that startup founders can harness to ensure their business success. This is especially true when it comes to fundraising.
The art and skill of listening will not only yield much better conversion rates in pitching during fundraising campaigns, but may significantly improve the terms you can raise money on, and the core metrics throughout your organization that facilitate future funding raising rounds.
Acing this pivotal part of startups is not just about finding the right appreciation and respect for the power of listening, but also learning how to listen better.
Why Listening Is So Important During Fundraising
Listening can make all the difference in successful investor meetings.
More than that, listening will prove the key to get into those investor meetings in the first place. From the data you collect, to how you pull it all together in your pitch deck, to your outreach messages and connecting with potential investors to get your pitch deck in front of them, listening will be critical.
This is inseparably intertwined with your overall business and sales success. Failure to show good listening skills when meeting with investors will not only jeopardize your chances of getting funding from them on its own, but is also a big red flag that you haven’t been listening to others from the beginning. That signals there may be serious flaws in the foundations of your company and all of your assumptions, products, and projections as well.
Understand how listening helps during fundraising is key to:
- Showing you respect your potential investors
- You have a real interest in what is important to them
- Getting the clues as to what they really want
- Understanding their concerns and objections and how to overcome them
The Cons Of Not Listening Well
There are many issues tied to not listening well. These include:
- Missing opportunities to build a better and stronger business with higher odds of success
- Leaner and less reliable data to report in your slides
- Not pitching the right investors in the right way
- Failure to produce a pitch deck that really nails what investors want to see
- Not being able to address objections and roadblocks to funding
Signs Someone Is Not Listening Well
What is it that will give away the fact that you are not listening well? What can you avoid doing that will suggest you are not being a good listener, or trigger the above issues and concerns?
- Multitasking, and being visibly distracted
- Allowing other interruptions
- Body language
- Verbally interrupting before someone else has finished speaking
- Taking the conversation on different tangents, suggesting you were thinking or pretending to listen instead of actually listening
Not paying attention to your investors can make a difference in nailing your pitch.
The Listening Test
It seems we have two ears and one mouth for a reason. Perhaps we should be listening at least twice as much as we speak. This 2:1 ratio is probably the best gauge of whether you are actually listening, and listening enough.
Practice this when practicing your pitch and presentation. Time it, or have someone else time you. How much of your presentations and meetings are speaking versus hearing.
Ways To Listen Better Applied For Fundraising
Start By Listening To Your Customers
The basis for any good company, let alone a good pitch is approaching and listening to customers in advance.
The best startups start out by going out to talk to and listen to their prospective customers. They often do this for months before even writing a single line of code, or forming an opinion about the best type of product to serve.
The more you can do this the better. It will give you deep clarity on the problem and your target audience. Nothing is more important when it comes to the foundation of a successful, sustainable, scalable, and fundable startup.
Record the data and find the common threads and ways to display it to investors. Actively learn how listening helps during fundraising.
Recruit & Listen To Advisors And Consultants
One of the biggest factors for investors is whether you are coachable or not. Often they are not just contributing and investing their capital, but their connections and experience and other resources too.
They know that this is what can often contribute the most to the success of a startup venture. So, it is really a big deal knowing that you can listen and implement good advice. If you can’t, then the outlook for your business idea is going to look pretty grim.
One of the best indicators of this ability is whether you have already proven to be able to solicit great advice and implement it.
So, begin by recruiting and understanding how listening helps during fundraising. Practice listening to your advisors and consultants. This can include general business consultants, and startup and fundraising specific consultants. This is vital, as it is always what you don’t know that kills you.
Change Your Mindset
Great listening starts with the right mindset. This can’t just be pretending to listen while you wait to jump in with your planned pitch or solution. It can’t just be acting like you are listening to be polite either.
Start by recognizing that 80% or more of your success directly relies on your listening. That should help you put it in the proper perspective and priority.
Then own the mindset that you are going into every interaction, conversation, and pitch with the goal of learning something (not selling something). If you learn something from listening to someone else you have achieved something.
This should bring you to the mindset of going in to listen to really hear and understand them. That can change everything.
How To Stop Yourself From Speaking
This can be hard, especially for entrepreneurs. You can’t listen if you are speaking. So, how do you speak less and listen more?
It’s hard when you are smart and think fast and know the solutions they need. Yet, you are just going to sabotage your solution and ability to offer it if you can’t stop and listen.
You’ve probably learned the way you speak and your current listening habits over time. It can be hard to change. You may have to retrain yourself. That’s all about hacking your psychology with new pain versus pleasure points.
Find ways to punish yourself and reward yourself to improve your listening. If you have to pinch yourself when you are talking or thinking too much, or treat yourself to your favorite frozen coffee when you nail it, find a solution that works for you.
Cut Out All Distractions
You’ll find it a lot easier to listen if you cut out all of the distractions. Make sure they know they have your undivided attention. Turn off your cell phone. Turn off extra monitors and screens.
Close other tabs and windows and turn off alerts on any screens you must have on. Try to position yourself where you won’t be constantly distracted or interrupted. If you are in your office, let your team know not to interrupt you. Convery why it is important to understand how listening helps during fundraising.
Your body language says a lot about whether you are listening or not. Remember that it is just as important to appear that you are listening as actually listening.
You may be able to run three screens, talk on the phone and listen to two different people live at the same time, but they don’t know that and won’t feel you are listening.
Face the person you are speaking with. Avoid closed and defensive positions, like having your arms folded. Maintain eye contact.
Repeat & Clarify
When there is an appropriate break in the speaking, take your time to repeat the main points that you heard, and be sure you are understanding their intention. For example, “Okay, so what I’m hearing is that you are saying A, B and C, right?”
If simply staying quiet and not talking doesn’t come naturally to you, then start getting in some practice ahead of investor meetings. You can begin with just practicing three minutes of silence. Try it in the morning, at lunch, and maybe even randomly throughout the day when you would normally feel compelled to talk.
SIlent retreats have become more common for executives as well. Consider expanding to a day, weekend, or even a week-long silent retreat. After that, staying silent and just listening for 20 minutes will be easy.
Practice Savoring Sounds
Practice savoring even the most mundane sounds. If you have a hard time pretending to listen, actively listening, or just staying quiet, then practice listening to even more mundane sounds.
Turn off all of your devices. Tune into single background noises. An airplane flying overhead, the washing machine, the traffic, and so on. If you can pull that off, then you can listen to anyone. Be keenly aware of how listening helps during fundraising.
Keep in mind that in fundraising storytelling is everything. In this regard for a winning pitch deck to help you here, take a look at the template created by Silicon Valley legend, Peter Thiel (see it here) that I recently covered. Thiel was the first angel investor in Facebook with a $500K check that turned into more than $1 billion in cash.
Remember to unlock the pitch deck template that is being used by founders around the world to raise millions below.
Practice Being Fully Present
If you’ve ever been told “you’re here, but you’re not really here,” then this one is definitely for you. Practice just being purely in the moment. You’ll find this incredibly beneficial in every area of your business and life.
Just say no to multitasking. When you are coding, be all in, and don’t be distracted by anything else. When you are at home with your partner, be 100% in the conversation and focus on them.
When you are out with your kids keep your mind there. Compartmentalizing your mind like this will help you be far more effective and productive in every area, and it will be a lot easier on your brain too.
One of the biggest challenges to real listening is going into a conversation adamant that you are right, already having your slick rebuttals lined up, and you are just waiting to plug the same rehearsed points and prove you are right and have the solution.
Don’t be sitting there adding up all the ways they are wrong and how you will criticize them and prove they are wrong. Instead, choose to be completely open-minded. Roll with the information you get. These are the vital first steps to learning how listening helps during fundraising.
Challenge Yourself To Listen More Than Your Competition
When you are out there fundraising you are actively competing against hundreds and thousands of other founders and startups for the same attention and money. The difference in who gets the funding may easily come down to how well you listen.
So, look at this as a part of the competition. You not only need the better plan, pitch, and pitch deck, but the best listener too. Can you win at that?
Ask More Open-Ended Questions
Get investors talking more and give yourself more fuel to listen to, by asking more open-ended questions. You do want to serve up the data points investors expect in your pitch deck and presentation, but you can purposely leave questions for them to ask, and then use that as an opportunity to ask their opinion on various parts of your plan.
Understand the importance of how listening helps during fundraising. This is especially true when it comes to fundraising. As a founder, it is important to have a healthy respect for the value of listening and the costs of not really listening.
Try employing these tips to become a better listener, and you may be surprised at what you hear and the difference it can make.
You may find interesting as well our free library of business templates. There you will find every single template you will need when building and scaling your business completely for free. See it here.
Hopefully this post provided you with some perspective as you are looking into how listening helps during fundraising for your startup.
In the video below How Listening During Fundraising Helps I cover this topic in detail.
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FULL TRANSCRIPTION OF THIS VIDEO:
Hello, everyone. This is Alejandro Cremades, and today we’re going to be talking about how listening helps during fundraising. Before we get started, make sure that you hit that Subscribe button, and this way, you will never miss out on any of the videos that we roll out every week.
Listening is essential. It’s the key and the recipe to getting the money wired into your bank account. In today’s session, we’re going to be breaking it down into different steps and giving you the insight as to how you can master listening to nail it when it comes down to your fundraising. So, without further ado, let’s get into it.
Listening is essential. It is what separates you and the money. That’s why it’s not about talking because the more that you talk, the more you’re going to be missing out on concerns. It’s about listening so that you understand the main reason or the concerns that are separating that investor from deploying their money or investing their money in a company like yours.
You need to understand that those investors have been doing their due diligence on the space. They’ve made the decision to invest in a company like yours, in your segment, and most likely, they have been talking with your competitors. Plus, you want to know why haven’t they placed a bet yet? That is why you want to listen. You’re going to have the pros, and you’re going to have the cons. Some of the pros are the following:
- Showing that you respect your potential investors.
- You have a real interest in what is important to them.
- Getting the clues as to what they really want, and understanding their concerns and objections, and how to overcome them.
There are obviously many cons when it comes to not listening. Some of those negative factors include the following:
- Missing opportunities to build a better and stronger business with higher odds of success.
- Leaner and less reliable data to report in your slides.
- Not pitching the right investors in the right way.
- Failure to produce a pitch deck that really nails what investors want to see.
- Not being able to address objections and roadblocks to funding.
So what could be some of those signs that showcase the fact that there’s a real clear lack of listening? Some of those could be the following:
- Multi-tasking and being visibly distracted.
- Allowing other interruptions.
- Body language.
- Verbally interrupting before someone else has finished speaking.
- Taking the conversation on different tangents, suggesting you were thinking or pretending to listen instead of actually listening.
You need to do the test of listening, and the test of listening is practicing the 2:1 ratio. What this means is that you need to be listening twice as much as you are speaking, and this is going to allow you and put you in a position to really get to those concerns because at the end of the day, what separates you and the money are the concerns in-between. For that reason, listening is absolutely everything.
Here, in this case, you want to really know that it’s not about building based on assumptions. It’s about building based on data, and I find that by having that qualitative approach and quantitative approach on how you’re able to collect data from your own customers and listening to it so that you can apply it to your 18 to 24-month roadmap of execution is a great starting point that is going to arm you to succeed later on during conversations with investors.
The other part of listening is for your team. You want to listen to your employees, to your co-founders, to your consultants, to your advisors, and perhaps make whatever corrections or modifications are needed. You need to know, as well, that over 67% of companies fail because of issues between the team members, so you do not want to showcase to the investor the fact that you did not take it to the next level when it comes to listening with your team and that there is clear communication in place.
Also, know that investors are investing in you. They’re investing in helping you to build the business, so they want to know that you’re coachable, and that’s why listening is also going to be a key factor for them in order to put the money in your company.
Listening nowadays is tough because we live in the era of communication, the crazy amount of information, the Information Age, as they say. The problem here is that especially now, where things are starting to go more digital and more remote, you have a ton of devices, you have a ton of things around you that could create and cause distractions. So, you want to silence absolutely everything when you’re having a discussion with your investor or that potential investor so that listening is not interrupted and so that you can be in the conversation.
It’s not about being in your own head; it’s not trying to anticipate what you’re going to say, how you’re going to look; none of that matters. It’s all about being in the conversation, dancing in the conversation with the investor, and knowing and delivering that answer to the concern that they have about your business and your industry.
Your body language is going to be very telling when it comes to listening. The last thing that you want is to not look at the eyes, or to look distracted, or to look somewhere else. You want to look at the eyes, right to the person in front of you, and make sure that they see that there’s a clear connection between you and them.
It happens all the time. When you’re speaking with someone, and that person is not looking at you, that creates a sense of lack of trust, and that’s the last thing that you want because fundraising is all about trust. Trust is super critical for you to gain access to that money.
Another way to confirm the fact that you’re listening and to make sure that you’re getting it right is to ask if you heard well what they said. Maybe if they perhaps asked or were mentioning something, you could say something along the lines of, “Is it exactly what you were asking: x, y, and z?” Then they will give you confirmation. Sometimes, that actually helps to tell the other person that you were listening and that you’re getting what they’re trying to explain. That creates a really nice and meaningful connection between you and the other party that is in front of you.
Try to be open-minded. The last thing, as well, is to right away start judging on whatever they’re telling you, or maybe they’re giving you some feedback. Don’t go into judgment mode. Be open-minded always, and be in the conversation. Then, after the conversation, maybe you can create your own opinion. But if you are in the conversation, you need to be bouncing back-and-forth with what they’re saying and with whatever you need to give them back.
Again, always, always, always when they’re asking you for something, give them exactly what they’re asking you for. If they’re asking you for a soccer ball, don’t give them a soccer ball, a basketball, a football. You need to give them exactly what they are asking you because also, you need to know that the attention span of the investor is very short, so during that attention span, you need to give them exactly the pieces of information that are going to be making a really big difference to them and specifically for them potentially making that investment in your company.
You should also ask open-ended questions. This is going to allow you to increase the listening, to increase the amount of time that you’re present with that other party, and to perhaps build further that meaningful connection between you and the investor. Essentially, remember that listening is everything. Without listening, there’s not going to be trust, and there’s not going to be a meaningful connection between you and the investor, and there’s not going to be any chance for you to know what the concern is that is separating them from investing in a business like yours.
So, hit a Like on this video, and then also leave a comment below and let me know what you’re doing when it comes to listening. Plus, Subscribe to the channel so that you don’t miss out on all the videos that we’re rolling out every week. If you’re raising money, send me an email at firstname.lastname@example.org. I would love to help out. Thank you so much for watching.