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Sorry, startup folks: There’s no sure-fire formula for squeezing money out of investors. But, if perhaps there’s a sure-fire way to scare investors off, it’s to come off as overly cocky. If you smugly show up and show off while pitching them, you’ll likely walk away empty-handed.
So says Cavan Canavan, CEO of FocusMotion, a Santa Monica, Calif.-based wearables software development platform (SDK) provider that he co-founded in 2013. The veteran sneaker designer and former Apple marketing intern admits it took him and his team a while to learn this lesson, and they learned it the hard way — a few times.
“As far as walking in and saying ‘Ta-Da! Here’s technology. Give me money,’ that doesn’t work,” he told Entrepreneur at a recent Virgin Galactic event in Los Angeles.
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What does, he says, is to “Know who you’re pitching to and know what they’re listening for.” When wooing VCs, he also suggests that you demonstrate exactly how your technology — or whichever product or service you make or provide — will earn potential investors money.
Do your homework, get your ego in check and reveal your plan for long-term financial stability in clear yet concise detail. And, remember, no one wants to put skin in a game that smacks of hubris or, worse, isn’t profitable.
For more of Canavan’s straightforward advice on how to attract venture capital, check out the short video above.