Getting pitched by a new startup? You’re probably face-to-face with the founder. At a local university, at a coffee shop, or perhaps in your own office.
You get to size them up.
You hope you ask the right questions. But most of all, you hope you have insight into what might be left unsaid.
Who are they? Why are they here? Those are excellent context questions. But the most important question you’ll ask the founder is:
What does the company do?
It sounds so simple, but it’s the most revelatory thing you’ll ever ask. The best angels I know, the ones who mix market knowledge, future vision and sixth-plus sense in amazing ways, ask this same question from several angles. In a way, it’s the only question.
The list sought to capture the core character of a founder. The questions were less about getting a lot of information, and more about the art and science of inadvertent capture. A combination of inquiries that revealed more in sum than they did as individual questions.
The Top Thirteen Questions for Leaders by David Grossman
- How did you get to where you are?
- How do you want people to know you? What makes you tick?
- What are your expectations of employees?
- What should they expect of you?
- On what do you want to put a stake in the ground?
- What’s your vision? Why should various audiences believe in you and the vision?
- Who are we and what do we do?
- What are our business goals? Business strategies?
- What initiatives will drive the business today? In the future?
- What are the new behaviors you expect employees to perform successfully to achieve your results? How will we get the results needed?
- What does success look like?
- How will we measure success?
- What needs to change to make this happen?
So how do you know if a founder is going to succeed? You don’t. But there’s a big indicator you can detect early.
It has to do with how the founder answers question 7.
If the founder can answer all of the questions but 7? That founder will likely need to be replaced in short order. That is, if you opt to invest at all.
How do I know? Because question 7 is about the company. About its ecosystem. About whether the founder respects it and has built it to be a living and breathing and growing thing. Or merely an appendage, an addiction, or a reflective mirror of himself.
Now a visionary founder will always put herself into her company. But there is a moment of birth, of separation, of realization. There’s a time when a founder lets go. If a founder is in business to fulfill his own need, his own weakness, a hurt from long ago? It’s a red flag.
Mythical hero journeys are certainly about overcoming near-mortal wounds. But those heroes that succeed are able to transcend the wound itself, to turn it into a new beginning. To overcome the addiction, the old framework that held them back.
The goal is creating something self-sufficient. A startup itself is disruptive. It’s a break from the past. One doesn’t ever want to delay its innovation-revealing capabilities. Or its launch.
A real story about a founder.
I recently left a project which showed signs of such delay. The technology was promising, and ready.
The founder was on a different path.
While I gathered several learning events along the way, remaining as sensitive as I could to the signs they offered, one stood out.
A founder continued to have reasons to delay the launch of his company. I figured at first that he was a perfectionist. Having had this issue in times past myself, I considered this with some empathy. But soon it proved to be something different.
While a set of crisp investor messaging had been worked out, the founder was using an entirely different set. The Board didn’t know, because he strangely was going out to do all his pitches on his own. Not involving others. I found out why.
He was pitching himself. Not the company.
He was never answering question 7. Instead, he told the story of a hurt, misunderstood boy who needed to make a deal. Horatio Alger it wasn’t. Needy and narcissistic, it was.
In most cases, this was a one pitch situation. It was a “practice.” It failed, but took little time. The first time an investor tipped me off, I did not want to think we had a real problem. But then this happened.
The founder was introduced to an investor. He flew two time zones away and had several meetings. He came back saying that the guy was “in.”
More meetings followed. More energetic claims of “in!” A few weeks later, I confronted the founder. I said “you’re spending a lot of time with this guy. What about the calendar? What about the company?”
He reassured me, with a childlike enthusiasm I found unsettling, that everything was great. He said “oh you know, the lawyer is holding it up. He’s IN.”
Two weeks went by. I found out that the so called funder prospect, whom I still strangely hadn’t met, had demanded more and more business plans. From an unlaunched company? I asked the founder why he’d spent so much time on them, when what we needed was a launch?
He said, “I’ve got him.” Again, “He’s in.”
Two more weeks elapsed. I joked that the investor did not exist.
The founder became a bit defensive. And I got some essential information.
“He’s IN!” he said, as if this meant anything anymore, after all the wolf crying.
“I told him the story of my life! About how this is going to make it for me! He’s rich, and we connected, he’s my friend, and he’s going to be there for me, I know!”
I was stunned.
I said, “did you pitch the company?”
He said, his voice rising, “of course I did!” I asked again. My voice was quiet. “Tell me what you pitched.”
There was silence.
I’m told that after I departed the project, the founder kept trying again. The company languished. The “investor” never materialized.
And no wonder. He never knew how great the company was. Or that it even existed.
A true leader? Is one who does.
Anne-Marie Fowler is an undergraduate lecturer in political communications and writer/policy advisor on Federal Reserve, Treasury, tax reform and budget-related issues. Her first book, titled “Full Faith” will address the evolving interaction between the U.S. Congress and the U.S. Treasury, as viewed through the lens of the 1995 and 2011 debt ceiling debates. A former banker who loves social entrepreneurship and advises political technology-focused startups, Anne-Marie is currently working with an innovative Silicon Valley nonprofit seeking to launch a data-driven model to accelerate both literacy and leadership.
Read Anne-Marie’s earlier guest post entitled Hot Pursuit. On Cheetahs, Discernment and Leadership.