There are lots of discussions about why people invest in early stage companies. Fear of missing out? Emotional gut reaction? Sensible diversified portfolio? For fun?
All of those discussions are interesting, but perhaps more important is why people don’t invest: because they don’t believe you can do what you’re proposing. Somewhere along the pitching process you have lost credibility.
People evaluating your early-stage business have very little material to evaluate. We don't have five years of historical financials, years of customer behavior data, or often much scientific data proving that your product even works. Minor things can therefore take on disproportionate importance.
Has this individual been 100% truthful and clear? Did they charge a $6 Starbucks to the startup or did they have a $2 filter coffee on their personal card? Are they shady, eccentric, scatterbrained, organized, thoughtful, considered?
Some of these first impressions might be entirely unfair, but they happen. Your defense is to present a credible picture in everything you do when fundraising – and, in fact, any time, because we will learn what you are like when you are not just in “pitching” mode.
Underlying philosophy #3: maintain credibility throughout your fundraising process.