Don’t let unsupported “facts” blow your investor pitch! — Cleve Langton
Founders constantly wrestle with how much research to include in investor pitches. The stakes are high: too little research looks unprofessional, but comprehensive studies can drain precious resources when every dollar counts. Good research isn’t cheap, yet performance claims without substantiation are essentially “trust us” statements that investors see right through. While some investors might accept anecdotal evidence if they’re already sold on the founder and product, most situations demand proof of concept. Research doesn’t need to be statistically perfect but must be directionally sound and credible enough to build confidence in your market opportunity.
I’ve seen two ends of the spectrum in pitches over the last few weeks. One type is referred to as “vivid research.” The definition of that is research that presents the information in a format that is emotionally engaging, statistically sound and easily imagined, producing strong mental images. I saw that used and it clinched strong investor commitment. It’s not cheap though.
On the flip side, one founder presented what one investor sarcastically called “ fence research.” You ask your neighbors on both sides of your fence and if they both agree, you assume the whole neighborhood feels that way.
My observation is that almost every presentation that was funded had some form of customer/consumer research as proof of concept of the product or service offering. It’s a tough call on the use of funds, where every dollar forces a trade off, but some sort of research validation is worth the investment. Would love to hear from researchers what their POV is and if there are research methodologies that address both validation and cost concerns, I’ll repost comments crediting contributors.
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