Do investors understand a word you’re saying?

In order for a pitch to be compelling, it has to be understandable. Most founders know that, and spend a lot of time trying to make their pitch and their deck make sense.

But what a lot of founders don’t know is how to find out whether or not it actually does make sense to investors.

So I’ll go through a few signs that investors don’t get it, and a few signs that they do.

Signs investors don’t understand: 

1. They don’t ask many questions.

Remember when your high school math teacher would finish teaching a hard lesson? They’d ask “Any questions”? And nobody would ask anything, even though they were horribly confused. Because they didn’t know where to start. 

Once someone reaches a certain level of confusion about something, they give up on trying to understand it. That same idea applies to investors with your pitch. 

2. They ask about things you thought you covered already.

This one’s obvious, but the solution might be less obvious.

When we work on decks at DECKO, we often repeat the same key piece of info on two or three different slides.

Founders fear this will annoy investors, but the truth is investors often won’t remember the info otherwise.

Plus, since most investors only look at a few slides, this increases the chances that one of those few slides has the info you want them to see.

3. They’re slow to tell you what they think.

Confused investors always end up saying no, but since they’re confused, it takes them extra time to do it.

Signs they do understand:

1. They clearly and quickly tell you what they think and why.

Just like all of us, investors don’t want to sound stupid or uninformed in a call. But if you explain your business well enough, you’ll make them feel like experts on it.

And if they feel like experts on it, they’ll be more than happy to share their expert opinion with you. 

2. They ask net new questions.

Net new questions are questions about things that actually weren’t discussed yet in your pitch, your deck, or anywhere else thus far.

A good pitch opens and closes the conversation on each point it makes. If your pitch is bad, you’ll end up explaining the same things 10 different times in new ways each time. 

Sum-up

It’s really as simple as this: if conversations feel productive, informed, and like they’re reaching an actual conclusion, you’re explaining things well.

If it feels like every call ends with unclear next steps and no real feedback, there are probably some gaps to fix.

One thing to keep in mind: rejections don’t mean you’re explaining things poorly.

But if investors are rejecting you for unclear, inaccurate, or seemingly invalid reasons, that might be a sign you need to adjust how you communicate about your company. 

Best,

Nathan