Systemic Traps

Systemic Traps
Read time 0.9 minutes

I spent all weekend working on taking the 3hr coaching session I normally do for $1499 as a 1 to 1 call and turning it into an ~8hr interactive course with worksheets and other tools that I’m planning to sell for $199.

While writing the course, I found that the most challenging part to communicate was systemic social traps. These are ways that the Venture Capital industry (or any system in life) is designed to lower your social status.

So let’s jump into that.

What is a Systemic Trap?
Imagine this…

You are starting a new company; you’ve developed a revolutionary new technology. Problem?

To build it to commercialization, you need $500k. What do you do?

You’d likely start by cold emailing VCs asking people for connections, etc. After a couple of weeks, you might get a VC who replies and asks you to send over a pitch deck and other information.

Not wanting to keep them waiting too long, you pull an all-nighter to get the pitch deck done. You send it off, then you wait. And you wait. wait. wait.

Finally, after 2 weeks, you hear back. “Looks interesting, let’s talk, CCed my secretary.”

You then go through the process of working with the secretary to set a meeting; the earliest appointment is in 3 weeks.

You spend weeks practicing your pitch, perfecting your deck. You read all my newsletters, and you’ve mastered the pitch!

On the day of the appointment, you drive into the office, and you get there 5 minutes. When you arrive, you are told to sit and wait. 5 minutes go by, then 10 then 15, and you ask the secretary if it will be long, and she says that the VC is in with another company and will be there soon. Another 5 minutes go by before they finally arrive.

You get to the room, and they bombard you with questions before you can even start your pitch. After 10 minutes of questions, you are finally given the floor.

See the Trap?

By the time you first get to pitch your company, your social status is so low that there is no reason that VC can’t just go on their phone, draw in their notebook or read the news on their laptop. You’ve acted like you’d do anything for them. You’ve put in hours of work to get there, and they have done nothing. It’s just such an honour for you to get the chance to pitch them.

When have you ever seen someone with such low status get a good deal from someone with all the control?

How Can Fix This

If you want to raise, you need to avoid this situation. A few ways you can do this include:

1. Set the agenda for the meeting when you walk into the door for that pitch. Say, “Great to meet you; glad we could find a time that works; since we only have 30 minutes, I’ll start with the pitch, then I have some questions for you, and we can leave 10 minutes at the end to discuss any outstanding questions you might have.”. Right there, you’ve taken control of the meeting; you are the boss, have the social status, and are in charge. They will listen to you and respect you.

2. Don’t wait for meetings. Have a go time. I recommend 10 minutes for a 30-minute meeting and 15 minutes for a 1-hour meeting. If an investor makes you wait longer than that, tell their secretary you have another meeting afterwards, you don’t want to have to rush out so to connect with the VC, and if they want to reschedule, reach out to you otherwise, no hard feelings, you understand they have other priorities. Again it shows you don’t need them and makes them chase you; now, they are the ones who look bad, and they are the ones asking you for a meeting, and you are in charge.

Summary

Make sure to be aware of who has social status in a meeting. The person without it often struggles to have their ideas heard and accepted. To increase the chances of raising capital, you need to avoid the traps built into the VC industry and ensure you stay on an even level with investors throughout the capital-raising process.

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Onwards and Upwards,

Liam Gill

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!