Why You Can’t Rely On Your Cofounder To Raise Money
Last year I was helping a VC friend of mine judge pitches for a pitch deck competition. There was a screening process before a prospective company was allowed to pitch.
There was this one company that everyone seemed to like. During one of the prep sessions, the company’s CTO pitched to us.
I asked a very simple question, “Where’s the CEO?”
The CTO answered, “Oh he’s busy with customers, so he can’t make it.”
I answered, “I see. I assume he will be there for the pitch competition Saturday?”
The CTO said, “No, I’ll be doing the pitch.”
My response was, “Then I am going to recommend that your company doesn’t participate in the competition. We need to hear from the CEO.”
It’s a red flag if you, the CEO, are not front and center when you’re raising money.
I was front and center with investors when I was raising money. It wasn’t about my ego. It was about what investors wanted and expected.
You, the CEO, are accountable to investors. And yes, your investors obviously want to see and hear from the rest of your team. However, it’s you they will be primarily assessing.
It’s virtually impossible to raise money if investors don’t have confidence in you, the CEO.
You’re going to be in a seven to ten year relationship with your investors. They are putting their trust in you. That’s why you need to be the frontman for raising money.
You will do the majority of the talking when you pitch. You may bring one or two key cofounders with you to your meetings. Typically, I would bring the VP Engineering to answer any technical questions, but you’re still front and center.
Just as importantly, don’t bring anyone to an investor meeting that isn’t going to add value.
There’s nothing worse than bringing your whole executive team, wasting 15 minutes having each executive recite their bio, and then they just sit there for the rest of the meeting. Yes, the ones you don’t bring might be pissed, but that’s up to you to manage.
Raising money isn’t about placating your founders egos. Raising money is about effectively raising money. And if that means that a cofounder doesn’t go to an investor meeting, then so be it.
For more, read: 7 Tips For Helping You Pitch VCs
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