HOW MANY PITCHES BEFORE
YOU GET FUNDED
How many NO's before you get a YES!
If you have a start up or are thinking of creating one, you will at some point pitch to investors. If you are not prepared it can be a back breaking, soul crushing process that can make you cast doubts on everything you have done so far and everything that you believe in.
I have studied how famous start ups and brilliant ideas pitched to investors to give you some idea of how many times you need to pitch before you are likely to get the first yes. Read on.
Howard Schulz was a successful sales manager for a Swedish housewares company. He found that his drip coffee makers were selling like hot cakes in Seattle. Upon investigation he found a coffee roasting company – Starbucks. Small, family owned, it made him want to get into the coffee business. After travelling to Europe and seeing the café business explode he came back and pitched to investors to buy out Starbucks. How many investors said no ? 5, 10, 20, 30, 50, 70, 100 ! A full 217 investors said a flat out No. Schulz persisted, never giving up. Finally number 242 said yes to giving him the money. The rest of course is history.
Sabeer Bhatia and Jack Smith, the men who brought us email, went to 20 venture capitalists before the first one said yes. They were convinced of the idea, had the proof of concept, were getting users rapidly and were the true pioneers. Yet 20 of the smartest people in the world could not see the opportunity that they saw.
The world’s largest hospitality company, Airbnb was looking to raise 150k for a 10% stake early on in their company. Here are some of the replies they got –
“ the market does not seem large enough, we can’t seem to get excited around travel, not our area of focus etc etc”. the company today is worth over 25 billion$ and has more rooms available than the Hilton.
Who hasn’t used Skype ! It does feel insane to hear that 40 venture funds rejected Skype. Eventually it went on to a 2bn$ exit, created a new industry of live calling and is today used by over 300 million people who make nearly 2 trillion minutes of video calls a year.
Udemy, the online education platform was rejected by nearly 100 investors before getting funded. Pandora had 300 rejections before the first investor said yes.
I have angel invested in a few start ups and we are pitching constantly. So far I have heard no a few times and a maybe a few times. Each time I end a meeting and don’t year a resounding yes, I remind myself that when email, sharing economy leaders, video calling technologies and others were rejected by 100s of investors, all I have to do is learn and persist.
Every no is a milestone to my destination. I know one thing for sure. Once I have heard no enough times, it means there is a yes coming around the corner.