The 4 Things Investors Look For in Every Pitch

EXPERT OPINION BY MAYA HU-CHAN, LEADERSHIP EXPERT AND EXECUTIVE COACH@MAYAHUCHAN

If you're a company founder, you've likely engaged in one of the most high-stakes, stressful steps of entrepreneurship: the investor pitch. 

No matter how much time, energy, and effort you pour into your pitch deck, the actual in-person pitch and how you show up as a founder are what matter in the end. 

Here are four things that investors, from angel investors to VC firms, look for in every pitch -- and every founder they want to invest in. 

Confident control

The conventional wisdom holds that investors look for founders who are passionate about their businesses. While this may be true, how that passion is portrayed can make or break a pitch. 

MIT researcher Lakshmi Balachandra analyzed 185 pitches from an MIT competition judged by real VCs. Her team measured the founder's visible passion -- categorized as enthusiasm, energy, and persistence -- against whether their pitches won high marks with the judges. The result? The highest marks went to founders who had calm, steady, confident demeanors, which investors equated with leadership strength. But beware of erring on the side of low energy, which can read as nervousness or insecurity. Practice your pitch so you develop the confidence and steadiness that comes with preparation. And avoid any temptation to engage in high-pressure sales tactics. Investors take a measured, thoughtful, long-term view and are turned off by must-act-now persistence. 

Build trust 

While competence matters, investors aren't looking for founders who can do it all -- they know that strong leaders hire qualified people to fill in knowledge gaps. What matters more is character. 

Balachandra also studied founder character. Her research with angel investors found that these investors, who often work closely for years with company founders, were most interested in startups whose founders conveyed trustworthiness, not competence. In fact, her research found that entrepreneurs who came across as trustworthy increased their odds of being funded by 10 percent.

Building trust can take months, if not years. How can an entrepreneur communicate trustworthiness during a brief pitch? First, when questions come up, be open and responsive. Investors feel secure with leaders who don't evade questions but instead respond truthfully and quickly. Second, be consistent -- with your values, motivations, and character. Investors trust founders who are easy to read, hinting at what could be an honest and open working relationship.

Be coachable

Both angel investors and VC firms expect to work closely with founders and their teams to grow the business. This requires founders who are open to mentorship, collaboration, and feedback, especially from investors who have the expertise to offer it. In short, investors look for founders who are coachable.

During your pitch, there are ways you can communicate that you are coachable. Ask for feedback, and greet it with openness and acceptance. If you receive critical feedback or objections, set any feelings of defensiveness aside and lean into gratitude and curiosity instead. This assures the investors that your ego won't get in the way of their investment. Instead, they'll have a partner who's open to growth and mentorship.

Be aware of gender bias

Gender bias has a well-known impact on VC funding. According to a report by the Harvard Kennedy School Women and Public Policy Program, women receive a disproportionately small share of funding from VC firms: 2.3 percent for all-female founding teams and 10 percent for mixed-gender founding teams.

Balachandra's research investigated how gender-based stereotypes play a role in investors' assessment of founders, and discovered that all founders, regardless of gender, were less likely to succeed at pitching when displaying stereotypically "feminine" behaviors, such as warmth, sensitivity, expressiveness, and emotionality. Those behaviors deemed stereotypically "male," such as forcefulness and assertiveness, were seen as more favorable. In short, Balachandra concluded that VCs are biased against femininity. 

Founders should not have to change who they are, but instead be strategic. Think of your pitch as a performance and be deliberate about which moments are best suited to portray assertiveness and confidence. Know yourself and when you may be naturally more sensitive or emotionally reactive, and practice toning down those moments. You don't have to be inauthentic in your gender expression, but it helps to know your audience, know their norms and expectations, and use that knowledge to your advantage. 

Before you close the laptop on your next pitch deck, remember that the impact of your pitch extends beyond your slides. Use those precious minutes to build trust, portray calm confidence, and demonstrate that you are coachable while keeping gender bias in mind, and you may be shaking hands with a new partner.

Photo Credit: Getty Images.