Why listening is vital during raising capital

Listening is not just one of the most vital tasks, it is the tool that startup founders can harness to ensure their business success. This is especially true when it comes to fundraising.

As I share with members of Impakt Tribe, where we help from A to Z with everything related to fundraising, the art and skill of listening will not only yield much better conversion rates in pitching during fundraising campaigns, but may significantly improve the terms you can raise money on, and the core metrics throughout your organization that facilitate future funding raising rounds.

Acing this pivotal part of startups is not just about finding the right appreciation and respect for the power of listening, but also learning how to listen better.

Why Listening Is vital during Fundraising?

Listening can make all the difference in successful investor meetings.

More than that, listening will prove the key to get into those investor meetings in the first place. From the data you collect, to how you pull it all together in your pitch deck, to your outreach messages and connecting with potential investors to get your pitch deck in front of them, listening will be critical.

This is inseparably intertwined with your overall business and sales success. Failure to show good listening skills when meeting with investors will not only jeopardize your chances of getting funding from them on its own, but is also a big red flag that you haven’t been listening to others from the beginning. That signals there may be serious flaws in the foundations of your company and all of your assumptions, products, and projections as well.

Understand how listening helps during fundraising is key to:

  • Showing you respect your potential investors
  • You have a real interest in what is important to them
  • Getting the clues as to what they really want
  • Understanding their concerns and objections and how to overcome them

The Cons Of Not Listening Well

There are many issues tied to not listening well. These include:

  • Missing opportunities to build a better and stronger business with higher odds of success
  • Leaner and less reliable data to report in your slides
  • Not pitching the right investors in the right way
  • Failure to produce a pitch deck that really nails what investors want to see
  • Not being able to address objections and roadblocks to funding
  • Signs Someone Is Not Listening Well

What is it that will give away the fact that you are not listening well? What can you avoid doing that will suggest you are not being a good listener, or trigger the above issues and concerns?

  • Multitasking, and being visibly distracted
  • Allowing other interruptions
  • Body language
  • Verbally interrupting before someone else has finished speaking
  • Taking the conversation on different tangents, suggesting you were thinking or pretending to listen instead of actually listening
  • Not paying attention to your investors can make a difference in nailing your pitch.

Start By Listening To Your Customers

The basis for any good company, let alone a good pitch is approaching and listening to customers in advance.

The best startups start out by going out to talk to and listen to their prospective customers. They often do this for months before even writing a single line of code, or forming an opinion about the best type of product to serve.

The more you can do this the better. It will give you deep clarity on the problem and your target audience. Nothing is more important when it comes to the foundation of a successful, sustainable, scalable, and fundable startup.

Record the data and find the common threads and ways to display it to investors. Actively learn how listening helps during fundraising.

Recruit & Listen To Advisors And Consultants

One of the biggest factors for investors is whether you are coachable or not. Often they are not just contributing and investing their capital, but their connections and experience and other resources too.

They know that this is what can often contribute the most to the success of a startup venture. So, it is really a big deal knowing that you can listen and implement good advice. If you can’t, then the outlook for your business idea is going to look ugly.

One of the best indicators of this ability is whether you have already proven to be able to solicit great advice and implement it.

So, begin by recruiting and understanding how listening helps during fundraising. Practice listening to your advisors and consultants. This can include general business consultants, and startup and fundraising specific consultants. This is vital, as it is always what you don’t know that kills you.

Change Your Mindset

Great listening starts with the right mindset. This can’t just be pretending to listen while you wait to jump in with your planned pitch or solution. It can’t just be acting like you are listening to be polite either.

Start by recognizing that 80% or more of your success directly relies on your listening. That should help you put it in the proper perspective and priority.

Then own the mindset that you are going into every interaction, conversation, and pitch with the goal of learning something (not selling something). If you learn something from listening to someone else you have achieved something.

This should bring you to the mindset of going in to listen to really hear and understand them. That can change everything.

How To Stop Yourself From Speaking

This can be hard, especially for entrepreneurs. You can’t listen if you are speaking. So, how do you speak less and listen more?

It’s hard when you are smart and think fast and know the solutions they need. Yet, you are just going to sabotage your solution and ability to offer it if you can’t stop and listen.

You’ve probably learned the way you speak and your current listening habits over time. It can be hard to change. You may have to retrain yourself. That’s all about hacking your psychology with new pain versus pleasure points.

Find ways to reward yourself to improve your listening. Treat yourself to your favorite coffee when you nail it, find a solution that works for you.

Cut Out All Distractions

You’ll find it a lot easier to listen if you cut out all of the distractions. Make sure they know they have your undivided attention. Turn off your cell phone. Turn off extra monitors and screens.

Close other tabs and windows and turn off alerts on any screens you must have on. Try to position yourself where you won’t be constantly distracted or interrupted. If you are in your office, let your team know not to interrupt you. Convery why it is important to understand how listening helps during fundraising.

Body Language  

Your body language says a lot about whether you are listening or not. Remember that it is just as important to appear that you are listening as actually listening.

You may be able to run three screens, talk on the phone and listen to two different people live at the same time, but they don’t know that and won’t feel you are listening.

Face the person you are speaking with. Avoid closed and defensive positions, like having your arms folded. Maintain eye contact.

Repeat & Clarify

When there is an appropriate break in the speaking, take your time to repeat the main points that you heard, and be sure you are understanding their intention. For example, “Okay, so what I’m hearing is that you are saying A, B and C, right?”

Practice Silence

If simply staying quiet and not talking doesn’t come naturally to you, then start getting in some practice ahead of investor meetings. You can begin with just practicing three minutes of silence. Try it in the morning, at lunch, and maybe even randomly throughout the day when you would normally feel compelled to talk.

SIlent retreats have become more common for executives as well. Consider expanding to a day, weekend, or even a week-long silent retreat. After that, staying silent and just listening for 20 minutes will be easy.

Practice Being Fully Present

If you’ve ever been told “you’re here, but you’re not really here,” then this one is definitely for you. Practice just being purely in the moment. You’ll find this incredibly beneficial in every area of your business and life.

Just say no to multitasking. When you are coding, be all in, and don’t be distracted by anything else. When you are at home with your partner, be 100% in the conversation and focus on them.

When you are out with your kids keep your mind there. Compartmentalizing your mind like this will help you be far more effective and productive in every area, and it will be a lot easier on your brain too.

Be Open-Minded

One of the biggest challenges to real listening is going into a conversation adamant that you are right, already having your slick rebuttals lined up, and you are just waiting to plug the same rehearsed points and prove you are right and have the solution.

Don’t be sitting there adding up all the ways they are wrong and how you will criticize them and prove they are wrong. Instead, choose to be completely open-minded. Roll with the information you get. These are the vital first steps to learning how listening helps during fundraising.

Challenge Yourself To Listen More Than Your Competition

When you are out there fundraising you are actively competing against hundreds and thousands of other founders and startups for the same attention and money. The difference in who gets the funding may easily come down to how well you listen.

So, look at this as a part of the competition. You not only need the better plan, pitch, and pitch deck but the best listener too. Can you win at that?

Ask More Open-Ended Questions

Get investors talking more and give yourself more fuel to listen to, by asking more open-ended questions. You do want to serve up the data points investors expect in your pitch deck and presentation, but you can purposely leave questions for them to ask, and then use that as an opportunity to ask their opinion on various parts of your plan.

Summary

Understand the importance of how listening helps during fundraising. This is especially true when it comes to fundraising. As a founder, it is important to have a healthy respect for the value of listening and the costs of not really listening.

Try to use these tips to become a better listener, and you may be surprised at what you hear and the difference it can make.

Please let me know in the comment box below, what is your nr 1 learning from this blog post.

Thank you in advance for sharing your thoughts.

To your start-up succes!

Jeroen van der Heide Co-founder & Ecopreneur

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