When youâre building and raising at the same time, itâs easy to focus on selling the story that you start losing touch with what actually happened last month.
Thatâs usually where things start slipping. The pitch gets stronger, the business underneath it gets harder to explain, and one simple question can give that away very quickly.
Thatâs why I asked Susan Montgomery to write this guest piece. Sheâs backed multiple companies that reached billion-dollar outcomes, writes the Angels and Unicorns newsletter, and has a new book coming out under the same name.
What she gets into here is one of the clearest investor tells Iâve read in a while. đđť
The pitch is working đ The business isnât
The pitch was excellent. It had a tight narrative, a clear picture of the market, and the founder knew their fundraising history cold. He also had a decent answer on competition.
He was also wearing a Patagonia vest, which somehow felt on-brand for the whole thing. By the time the deck ended heâd said the word âmomentumâ five times. I remember because itâs one of the words I always keep a tally of when Iâm being pitched.
I made one request. âWalk me through last month.â
The long pause was eventually followed by, âWeâre seeing really strong traction across multiple channels and the market response has been very positive.â I stopped taking notes.
Thatâs not a business update, itâs a brand statement. Iâve heard a version of it in more first meetings than I care to count, usually from founders whoâve spent three months on the pitch narrative and about seven minutes on their numbers.
What Iâm actually watching for
By the time Iâve agreed to meet you, Iâm not really watching the deck. The deck is what got us in the room in the first place.
Iâm watching for the gap between what youâre saying and whatâs actually happening in the business. This is easier to spot when Iâm tired and grumpy, which probably says something unflattering about late afternoon slots.
A deck is designed to close that gap. If it got us together, then itâs a good deck. Youâve worked hard on it. But the gap shows up in how you answer the question that wasnât in the prep and that no deck ever covers.
So I make the same request in every first meeting. Not because Iâm so smart, but because it works and I havenât found anything better.
Walk me through last month
Founders who know their business can usually answer in under sixty seconds. They give me one number and what moved it, or one decision they made or didnât.
Whether the number is good or bad is almost beside the point, which still surprises some people when I say it. What Iâm looking for is operational clarity.
Founders who are running on narrative answer with narrative. Trends. Channel response. Market signals. Healthy pipeline. No number, no cause, no decision.
The longer the answer, the wider the gap. Iâve never had a founder answer like that and turn out to be running a tight business underneath it.
Maybe the exception exists somewhere. Iâve mostly stopped expecting it.
The thing I donât know how to fix
Most founders in a fundraising process have spent more time on the pitch than on their operating data in the months leading up to it. I understand why. The pitch gets you in the room. Nobody schedules a meeting because your MRR tracking is clean.
But somewhere in the preparation, the pitch stops being a representation of the business and starts replacing it. The story becomes load-bearing and the founder starts knowing their TAM better than what happened last month.
The strange thing is that by the time theyâre in front of me, theyâre not exactly lying. Theyâve just been in pitch mode long enough that the pitch feels like truth.
I donât have a clean answer to this. The obvious one is âstay close to your numbersâ, but founders raising a round are doing twelve things and the numbers rarely feel like the most urgent one.
What I can tell you is that the founders who stay in contact with their operating data during a raise are noticeably easier to talk to. The meeting just feels different, more relaxed and less performative.
If youâve already closed a round
Donât think this stops applying once youâve raised. Youâll likely raise again.
The next roundâs investors will be later stage, less patient with narrative, and quicker to spot the gap. What passes at seed doesnât pass at Series A.
Not because Series A investors are smarter, but because theyâve sat through more of these meetings and the filter gets tighter with exposure.
Run the test on yourself now. Whatâs your answer? Pick last month. One number and what caused it. One decision you made as a result. Say it out loud. Time it. If you canât do it cleanly in sixty seconds, itâs worth asking why before someone else does.
The pitch should be good. That partâs not wrong. It just shouldnât be the thing you know best when you walk in.
đ¤ Susan Montgomery backed 13 unicorns at pre-seed and seed. In Angels and Unicorns, she writes about what investors are actually clocking in those first ten minutes, and why founders often miss it until itâs too late. Subscribe for a clearer view from the other side of the table.
Two more reads before your next investor pitch
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Thanks, this is really interesting. I'm considering raising in the next six months, and so I'm keeping a close eye on your content. The question I always ask suppliers when they are pitching me is telling me about when it went wrong for a client. I try to position this as "How does this go wrong?" so that I can avoid the same mistakes, but I'm just looking for a bit of honesty. I'm looking for someone who admits that it does go wrong. Because of course it does.
Thatâs the problem. Words sound better than a written plan.