If you want startup funding, don’t make VCs feel ignorant

Keep investors engaged with low cognitive load questions

In nine years as a VC, I have seen many founders misinterpret the standard advice to ask potential investors questions during pitch meetings.

Frequently, these questions can derail, distract, and make investors feel defensive. To avoid this, I train founders in a strategy inspired by my experience as a high school math teacher which focuses on building rapport, maintaining constant engagement and creating a shared reality. The key is the effective use of low cognitive load questioning.

In other words: only ask investors easy questions.

Let’s say your company is a paper mache startup. As a generalist investor, one of the worst ways you could start a meeting is by asking me to share my thesis on the paper mache industry. I don’t have one, so as soon as you ask that question, my cortisol levels will rise like a nervous student who didn’t do his homework and just got called on by the teacher.

Save the challenging questions for when you’re selecting from multiple investors who are ready to write checks after you’ve convinced them your company is fundable.

I will then proceed to save face by making up the smartest-sounding stuff I can on the fly. But I will know deep down that whatever I just said was a load of nonsense, and on a subconscious level, my brain work towards getting this meeting over with as soon as possible to avoid further callouts.

If you were hoping I would invest in your company, this is a bad place for us to be. Save the challenging questions for a time when you’re selecting from multiple investors who are ready to write checks after you’ve convinced them your company is fundable. In your initial discussions, ask easy questions. These can begin with simple yes/nos.

Asking students easy questions is one of the engagement tricks I learned as a math teacher: If I made them think too much at first, I would often get blank stares and no responses. But if I asked a relatively easy question, like “What is opposite of addition?” I’d get an answer immediately. Approach an investor pitch similarly.

In the paper mache example, you might ask the investor if they have ever used the material to make something. If your company builds a tool that automatically runs Facebook ads, you could ask if they’ve ever run an online ad. It’s totally fine to ask yes/no questions here: The goal is just to create a back and forth, not to learn what the investors know. When you get really pro, you can use those answers to adapt your pitch, but that’s not necessary at first. Let’s walk through some of the dos and don’ts of this example.

If the investor says yes, they have run a Facebook ad, follow up by asking if it was easy to accomplish. Again, you’re asking another yes/no, low cognitive load question, but you are keeping them engaged, which builds rapport, the first goal. Most likely, that investor will say it was somewhat difficult to run an ad, or more difficult than it should have been.

In that case, the question has moved us towards creating a shared reality. In this case, you might have made the investor to acknowledge a core conceit of your pitch story, that yes, running ads is hard.

If they haven’t run ads themselves, you could ask if they have ever noticed an ad on Facebook. Using the word “notice” leaves enough ambiguity to give them an easy out (“no, not really, I don’t pay much attention”) while giving them space to expand if they do have thoughts.

Based on their response, you can follow up by saying, “Actually, even though they look so basic you hardly notice them, you wouldn’t believe how much goes into making them!” Now, you’ve gently primed the investor to be thinking about Facebook ads, assured that they are following along and engaged, and you’ve broken ground on building a shared reality. This type of questioning works well not only at the beginning, but throughout your pitch.

Another type of question, best suited for earlier in the pitch and creating that shared reality, is the classic, “What’s your guess?” An example in the ad space could be, “What’s your guess as to how much it costs to hire a marketing agency to run Facebook ads?” These questions work best when there’s a big delta between what most people would guess and the reality.

If the typical guess is $1,000 per month and the reality is $20,000  to 30,000 per month, that will be a genuine surprise, and that makes this an effective way to convey a part of your story without telling it. The investor will feel more attached to what you’re saying because you allowed them to co-create it by merging their reality with yours. The question and guess do not need to be numerical. You could ask a question like, “Which state do you think has the most mailboxes?” or “What is the most popular color for baby clothes?” as long as they are relevant to your story.

What to avoid

I would be careful using the “Did ya know?” questions, as they can come across as a little silly. A good example of this is, “Did you know that modern commercial airliners actually cruise slower than the commercial jets of the 1960s?” An okay one might be, “Did you know online advertising spend is projected to surpass a trillion dollars by 2025?” And a bad one would be, “Did you know it’s hard to run ads on Facebook?” That’s just phrasing a statement as a question. Don’t do that.

Peppering a pitch with simple, low cognitive load questions will guarantee that the investor is paying attention, and is very likely help to build rapport that gets the investor on your side. Do not try to challenge an investor’s knowledge early on, unless revealing a surprising and intuitive fact is central to your story. If you do need to do that, do it gently.

Used skillfully, yes/no and short-answer questions can help create a shared reality between you and the person you’re pitching to, which is important for getting a follow-up meeting and essential for convincing them to invest.