Investors aren't passing on your idea. The big misconception is that founders treat the pitch deck like it's the last step. You got to understand that investors see thousands of these each year, so it's more like a filter. You having one and having one that looks good is important (that's why you shouldn't have some weird lock or have investors sign an NDA to look at your pitch deck. You're going to turn a lot of investors that way.) Let's break down what fundraising readiness actually looks like.

I can definitely tell you what not being fundable looks like.

The first issue is not having a clear raise amount. This is always weird to me, because as a founder, you have to know how much money you need to get to the next level. If you're going to raise capital, you need to be at least in a position to be profitable. Even if you're in something like hardware where you still need to build the product, you should know how much that costs.

If you don't have a list of investors that you actually want to work with, it's probably not going to work for you. Most founders are going to struggle raising capital because they don't even start with the right people, with the right firms, with the right angel investors. They just go after anybody on LinkedIn that has the word investor in their name, and they could be talking to somebody that's in real estate or focusing heavily on the stock market. To get your investor list ready to go, yes, I have an article coming on that one as well.

Something else that looks just terrible to investors is not being able to pitch without looking at your slides. This one sounds crazy, but think about it. If you can't talk to me for 30 seconds or five minutes about your product that you're building and why the world needs it, why you should build it, why I should fund it, you probably don't even believe in what you're doing. If you have belief in what you're doing, that alone can push you to have enthusiasm and be able to talk and be able to convey the value. Now, you might still need some strategy and need to polish your pitch up. If you have to look at your slides, to me, that just says low confidence. If you're in any one of those phases, you're not fundable. You're not investor ready.

Let's talk about what makes you investor ready.

One pattern that you as a founder have to be aware of is that a lot of investors decide fast. Within the first 90 seconds, they really decide they're going to keep listening to you or not. That's why it's so important that in those first two minutes you talk to an investor, you really wow them with who you are as an individual founder and how you can execute this very unique idea. The goal early on is to keep their attention and show them that you're different. That matters before anything else.

I like asking investors about this part, too. Ask over 50 investors what it is that they really decide on very early on, and they care about confidence and who you are as an individual founder. See? Most founders talk about the technical stuff and get really deep on that, because it does matter. To even get to that point, you have to have confidence and know what you're talking about and be ready to even talk to them.

I also think the rejection number is so high with fundraising because a lot of founders don't do the research required to even start these conversations with the right investors. You could be enthusiastic and an incredible founder and exactly what a founder should be, but if you're starting off pitching to the wrong investor, you're going to lose. I mean, think about it. If this investor only puts money into consumer products, specifically business-to-consumer, something that's very, very specific, but you're coming in with some fancy AI tool, they probably won't be too interested in what you're doing. You got to understand that investors are making decisions fast. That's how they go through so many startups every single year. If you had to look at over a thousand companies a year, you will move on pretty quickly too.

Another really key thing is your finances being in order. Now I'm not saying you need to have everything perfect and down to a tee immediately, but again, if you're asking an investor for money, you need to be ready to accept this money. The deal room has to be set up. Your paperwork has to be ready to go. I had some founders I've spoken to who didn't even have somebody basically versed in finances on their team. If you don't have that person, you at least have to have some kind of software that's helping you out.

If you're already profitable and you're making some kind of money or bringing cash in, you need to be able to show that it needs to be organized. A screenshot from your checking account at Bank of America is not a good look. These are the small things that founders overlook, but the investors are paying close, close attention to.

This pillar is one of the most important out of all the fundability pillars because it's the most valuable. There's really no excuse for you to be sitting down to talk with an investor and you're not fundraise-ready. Meaning you have everything set up and ready to go that an investor needs to see. If you've done the work of getting the warm introductions and scheduling the call, sometimes even traveling to these meetings, the investors just automatically assume you're ready to go, which they should. I totally understand that.

If you get to the table with an investor and you just aren't ready to have a conversation and you're not ready for the next steps like due diligence, you honestly ruin your opportunities, because it's a different thing. I may introduce a founder to an investor and say, "This is a founder that I'm working with that I know, and they want some insight. They have some questions for you, whatever you have." That's a conversation. That's more of a pre-consulting call. If you, as a founder, go to an investor and you're asking them for money for your startup, but you're not ready to talk about your business, you are ready to receive the money, none of that stuff, you can even burn a relationship. You have to be ready before you have these deeper conversations.

Okay, there are a few things that you can say that make investors immediately turn away. If you listen to the next Round Ready podcast, this is where I asked the question about red flags, because investors will literally tell you. One thing that's an immediate turnoff for investors is a founder who's not coachable.

Sometimes this shows up in the due diligence process, where some founders are just difficult about getting on a phone with an investor. Other times, founders are hesitant to share access to their deal room or different company details. If you're doing difficult things like sending your pitch deck through Docusign, you’ll lose the attention of some investors.

Now, it's a green flag when you, as a founder, are able to get the investor to understand your perspective in a short period of time. If you can make them believe in the idea that you have and believe you're the person to solve the problem you're focusing on, you can almost guarantee a conversion, because you have to remember that, at the end of the day, investors are putting money into you as a founder. They understand that a pivot might happen, that your focus for the company might shift. It probably will. That's why they want to do so much research on you as a founder

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