- Persuade & Raise
- Posts
- Event Recency Bias
Event Recency Bias
Read time 1.1 minutes
When pitching investors, many factors can negatively impact your business. Some of these are 100% out of your control. A prime example is Recency Bias.
Imagine this. You have an incredible financial product. It will revolutionize the way that investors can access cryptocurrency markets across the globe. You’ve worked on this for years and finally have a chance to pitch a prominent VC who can help you move forward.
You walk into the VCs office and are immediately hit with questions about FTX. Every time you try to get started on your pitch and narrative, there is always a question comparing you to them.
Suddenly your entire pitch has been thrown off, and before you know it, you leave the office without communicating your vision.
What is Event Recency Bias?
People are most impacted by the events that have happened most recently.
Sport is an excellent example of this, where a player with a great year after numerous bad years is often viewed in higher regard than one with a series of great sessions followed by a bad year. This trend continues despite extensive data showing that most athletes return to their “normal” form after outlier seasons.
 | Achieving SOC 2 compliance proves to customers that you prioritize protecting their data. In fact, this proof of compliance can help you raise capital, scale your business, and rise above the competition. Vanta’s SOC 2 checklist breaks down the process and gives you a digestible view of the road ahead. Download it here to get started. |
How Can You Use This
Research VCs before you pitch and know if there will be recency bias. Especially if there is a significant failure in your industry, like FTX, Theranos, WeWork, etc., consider starting your pitch by directly addressing those companies and discussing your differences.
If your entire industry is viewed negatively (for example, VR, Metaverse, Crypto), start by talking about why others have gone wrong and why you can deliver on the potential investors once believed were there when they regularly backed companies in your industry.
Target VCs with recent exits in your industry. It’s easier to sell a finance product to a VC who just made $100M selling shares in a finance company. Use Crunchbase and target investors, especially after their big wins!
Do you prepare yourself and plan for event recency bias before a pitch? |
Do you want a chance to be featured across my newsletter network, reaching over 5,000 investors and 90,000 subscribers for free?
Tweet @LawyerLiam with a review of this newsletter or, better yet, share how you are implementing what I share to benefit your business!
Onwards and Upwards,
P.S. Are you ready to take the next step in raising venture capital for your company? If so, you can now book a 1:1 strategy call with me to help get you going in the right direction!