Why don’t good ideas get funded? Here’s the answer…

Many good ideas don’t get funded. We all accept that.

And many bad ideas do get funded. That is harder to accept, but accept it we must.

So, what is it that determines whether an idea gets funded or not?

Is it just the quality of the idea? Clearly not…

It begins,  I believe, with the quality of the leadership and the leadership team.

Leadership, you say? And how exactly do you define that?

Leadership is the level of influence that a person or a pitching team has. No more, no less.

And, what makes a pitching team (or founder / CEO) influential in front investors? Here’s my take

1. An ability to connect with the investors

Top of my list is an ability to speak the language of business angel investors and VCs and recognise that for many investors their involvement is because they want to do something exciting that ‘could’ make money rather than something dull that is certain to make money (ie long term interest bearing bonds).

Investors know that you might lose them their money. So an ability to make appropriate promises is key. Avoid phrase such as ‘give me the money and I’ll make you rich’ as these guys don’t need you for that, they are already rich, and it shows that you don’t really understand what makes them tick.

Equally, investors will assume that if you are unable to connect with them, then you might struggle to connect with your growing team, customers and suppliers too.

Want to raise your level of leadership and ability to connect?

2. A track record

There is nothing like a track record where you raised funds and delivered health profits to investors. Of course, if this is the case, then you probably aren’t pitching to a room full of investors but a carefully chosen group.

So, if you are in the room then what track record might you demonstrate?

Well, clearly successes are important. However, it is wise to be careful of taking all the glory for yourself.

Great leaders are able to point to the successes being a result of the team – rather than themselves.

This is powerfully demonstrates an ability to led and build successful teams (rather then being the clever clogs all by yourself).

Another great way to demonstrate success is to show how the people who used to work for or with you – in your previous roles – have gone on to do amazing things.

Or, show how you made your role redundant at at a previous company.

If you are able to model this kind of leadership, then it is likely that you can hire a top team and enable them to achieve great things.

3. Established relationships

Do you know your audience? If you can get to know your audience before you begin then you are at an advantage.

Rather than hide back stage checking your notes before you go on stage to pitch, get out into the room. In fact ‘move slowly through the room’, greet everyone and get to know them. If you have a chance to sit down and share a joke or find out about your audience BEFORE you pitch, then you will significantly impact on the quality of your pitch.

Equally, if you know a few business angels or VCs who are warm to your proposition, then make sure they are invited to attend your presentation. It makes a big difference when you have a few supporters on your side when presenting.

4. Team before Spreadsheets

Do you empower people to make decisions or are you trying to control everything from the business plan spreadsheet?

Hmmm…. too many startups believe in the magic of a spreadsheet – if I build the spreadsheet then customers (and revenue) will come… not so true!

If the business plan takes a secondary place to the quality and energy of your team, then it will have found its rightful place.

5. Quality of your presentation demonstrates the leadership quality

Is your presentation fun? Are you relaxed and able to engage? Do you have product or service that has been well thought out so that you can express a powerful idea in a few words? Have you identified the key objections and are you able to bring powerful evidence (often sales) to demonstrate your case? Have you chosen the right time to pitch your business to investors?

All of these factors will demonstrate whether or not you are an effective team.

Great teams with great leadership deliver excellent work. When you meet with business angel and VC investors – one to one or at a pitching event, you must be ready to demonstrate the quality that you have built.


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