This Secret Weapon Will Convince Investors To Fund Your Startup

Investors are busy people, and many have seen thousands of pitch decks in their careers. However, they end up choosing to invest in very little, regardless of how attractive some may seem to most people. The truth is that good ideas alone are not enough; it’s only part of the equation. It is important to convince investors that you have the right idea, that you are the right person and that this is the right time.

That last factor is very important: Venture capitalists will not invest in something that seems to have few pressing needs in the world, and will not get where they are if they get used to it. Over a decade of looking at pitch decks, I believe this is the silver bullet to success.

Most founders fail to make investors believe that there was a consumer base out there who missed their product at the time; when I saw startup founders nail that “urgency effect”, the mood of the room completely changed. If you can find it—this silver bullet that cuts through all the noise—then your pitch will level up.

I have identified three ways to produce this urgency effect.

1. Behavior

Attitudes and tastes around the world are constantly changing, which is a nightmare for established companies, but a gift for startups. Whenever behavior change occurs en masse, some doors close but others open… when you can really take advantage of opportunities.

Taking a broad scan of the current behavior change, there are a few that stand out: Covid-19 has clearly been a big driver, especially in encouraging people to adopt e-commerce at a faster rate than expected; supply chain issues drive the need to maximize material sourcing and find more local manufacturing options here in the US; and climate change and sustainability are key issues, especially among millennials and Gen-Z.

These recent changes include a shift in consumer patterns of young people away from the excesses of the older generation and towards environmentally responsible products, including meat alternatives, as consumers are increasingly aware of the meat industry’s impact on carbon emissions.

This is just a partial list to show you one thing: Find behavioral changes, shifts, or patterns occurring in your industry and see if your products or services respond to them.

If you can support perceived behavior change with hard numbers, expect investors to sit in their chairs and pay attention to whatever you have to say for the rest of the presentation. For example, given the fact that a third of millennials are willing to pay more for sustainable products (according to the 2021 Global Sustainability Study by Simon-Kucher & Partners), investors will want to see how they can benefit from this trend.

Related: This Entrepreneur Shares What You Can Do to Nail Your Investor Pitch Deck

2. Rules

Behavioral change usually doesn’t happen overnight, but regulatory measures can force a change of likes or dislikes. There are many instances when governments have changed the rules that the private sector uses, resulting in winners and losers. You just need to convince potential investors that you will be one of the winners.

The web is now a magnet for regulators as they try to catch up with the fast pace of innovation. Accessibility requirements and potential litigation give rise to companies aiming to solve a variety of problems for companies, including proving compliance with those requirements (or risking consequential fines). To investors, it may not be clear that the world desperately needs such a company, until the regulations say so.

The General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA) are the main laws that have been enacted over the past few years. This has spawned many startups aimed at helping organizations ensure they don’t violate their terms. The demand for such services is immediate and extraordinary, which means the growth potential is tremendous.

If you believe changing the rules is your silver bullet, then you need to act fast. If you’ve seen an opportunity, it’s a safe bet someone else has too, so have a pitch deck ready and ready so you can meet investors before the issue hits front page news.

Related: Create the Perfect Pitch Deck Without Hiring a Designer

3. Hot

This final pathway to urgency is perhaps the most mischievous, but also the most effective. To take advantage of it, you have to be obsessed with your market and know everything that’s going on with the companies that share your space. If you can show investors that the sector is heating up, then you can hit their FOMO receptors if they don’t invest in you.

Stories to watch out for include competitors having big funding rounds, big acquisitions, and big IPOs. These all indicate that money is flowing into the industry and that other investors are confident in its future prospects (and the result can often be a bidding war).

It doesn’t matter if competitors are doing well when the market is still in its infancy. As history has taught us time and time again, first movers are often not people who see long-term success. (Just ask Myspace or Bebo.) What hot does is give investors a strong signal that your company is fixing a problem that needs fixing, and that through you they can gain exposure to the overall growth of the market. This creates urgency, because if they keep talking to different companies for too long, it is feared that they will be too late to take advantage of the early stages of growth. When they know their competitors are making big bets, they don’t want to be the odd one out and lose money on indecision.

During Airbnb’s IPO last year, its CEO, Brian Chesky, re-shared an excellent blog post entitled “7 Disapprovals,” which included seven rejection emails it received as the company tried to raise $150,000 at a $1.5 million valuation. When they finally IPO, the company’s valuation is $47 billion. Can you imagine how the disclaimers felt?

Bessemer Ventures, meanwhile, takes its losses with some humor, featuring an “Anti-Portfolio” honoring the companies they missed. (Yeah, you guessed it, Airbnb was there too.) But what if they could look to the future and have a company that excites them enough to showcase the brand’s potential? That’s where this silver bullet comes in.

Obviously, you can’t just sell the market: you also have to sell your business, but the purpose of selling the market to investors is to highlight the opportunities they could potentially have.

Related: Why A Sense of Urgency Is So Important For Startups

If you want to convince investors that they should invest in you, then you need to start finding your silver bullet as soon as possible. Every time you go on the pitch without it, you don’t make the most of your chances. Once you’ve created a sense of urgency for your startup product, don’t be surprised if you find yourself picking up the phone and it’s an enthusiastic investor on the other end.