Don’t Make These 5 BIG Mistakes When Answering VC/Customer Questions
When pitching a potential investor or customer, time is of the essence. Most of that time goes to the meat of the conversion: the question-and-answer portion. During Q&A, both sides start engaging in a sort of conversational dance - with one side leading (VC/customer) and the other side following (founder). But often, we’ll hear founders misstep and repeat easy mistakes that throw off Q&A flow and cause startups to lose points. In this Dose, Mike Ravenscroft, Startup Success Manager of Dreamit Healthtech, reveals his top five common mistakes founders make when answering customer and investor questions.
Mistake #1: Not Answering the Question
Mistake #2: Blabbery
Mistake #3: Misunderstanding the Question and Not Asking for Clarification
Mistake #4: The Pile-On
Mistake #5: Treating Q&A as a One-Way Street
Not Answering the Question
You would be surprised how many founders struggle to directly answer the question that’s being posed. While politicians may be masters at deflecting away from questions they are asked, that is not productive for a founder pitching. You do not want to create a sense of discomfort by not being straightforward when answering a question.
For example, an investor asks, “What’s your monthly recurring revenue?” and you respond with how your new sales approach is crushing it or how your new sales person is a rock star. That’s a tell you feel uncomfortable talking about your MRR. And you’ll get asked the question again, and again, until you answer it.
Clear and concise answers build credibility while non-answers destroy it.
Blabbery
A wordy answer to a question can be just as bad as avoiding it. The longer you talk, the more you risk confusing the audience or losing their attention. The point of answering questions is to get to the next step in the process and poor Q&A acumen hurts those chances. To keep answers crisp, Mike suggests the 45-second rule.
There is no question that can’t be answered in under 45 seconds. If the audience wants more, they’ll ask.
Misunderstanding the Question and Not Asking for Clarification
Customers and investors commonly ramble and wrap several questions into one. At times the question may be as clear as mud.
Instead of just jumping into the answer, it pays to take a step back and ask for clarification. Not doing so might cause you to answer the wrong question. Instead of interrupting, most people just wait until you are done speaking to ask you the same question just modified. It is awkward and wastes a lot of time.
You are not at fault when people ask confusing or convoluted questions. But you risk wasting precious minutes if you don’t pause to clarify or restate the question.
The Pile-On
Often team members step on each others’ toes to jump in and add information that was already provided. Like the expression “too many cooks,” things get messy when questions are answered by too many people.
“Multiple answers from multiple people always muddies the waters.”
Overlapping answers don’t help. Contradicting answers are worse. Both reflect poorly on the CEO and management team who lose credibility appearing out of sync or not in control. The solution - have the CEO handle all the questions or direct the question to a specific team member.
Treating Q&A as a One-Way Street
Founders can take a firing squad approach to Q&A. They tend to enter a room with their backs against the wall and get blasted with questions. Although it may be intimidating, you aren’t against the wall – you are at the table with everyone else. Part of your job as a founder is to gain additional insight.
Answering a question with a question is a classic and effective sales technique. Learning more about your customers’ problems and challenges will better equip you to properly position your product or platform. It’s similar with investors. If you don’t ask questions about how they invest, their thesis, or what their diligence timelines look like, it’ll just look like you're only interested in getting funded rather than finding a strong partner.
By Elliot Levy, Healthtech Associate at Dreamit Ventures
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