“Develop your dreams. Advertise your goals. Execute your plan. Close the sale.”
You’d be surprised how often the last part of this equation is missed by founders, closing the sale. In exchanges with employees, investors, influencers, and potential customers, a sales conversation takes place. This is the basis for what I call ‘founder selling’ — the act of a founder identifying when you are in a sales conversation and learning how to maximize mutually beneficial terms in a sale.
As founders, we don’t always realize a sale is taking place. For example, when an employee attempts to convince us that the product should be built one way instead of another, the employee is selling us. However, we can also sell them on something: our loyalty, management style, ability to teach others, a new way to think about the product, or even simply that we hear them and value their opinion. The key is recognizing that each party has the opportunity to make a sale, which creates space for both parties to maximize their returns. Knowing what you’re selling and what is being sold, allows participants to establish a level playing field and maintain a dynamic in which both sides are winning.
Let’s use investor meetings as another example. This is a common scenario when the skill of ‘founder selling’ can come in handy. Successful ‘founder selling’ has three rules:
- Identify what you’re selling: A killer team; an awesome product or idea; current traction; a solid market opportunity with great timing. All of these make an investment less risky for an investor, and increase the likelihood of healthy returns. This is a founder’s leverage in the sale.
- Identify what’s being sold to you: An investor is selling you on their portfolio, reputation, knowledge, access, follow on investment, and terms on their capital. They’re selling you on the promise of a positive, beneficial, long-term partnership — the safety of knowing when times get tough, they can and will support you.
- Don’t settle: Similar to selling to the wrong customers (LINK), selling to the wrong investor is extremely costly to both sides. Make sure you know what you are buying and selling in the exchange.
A startup isn’t powerless in an investor meeting, even though at times it might appear this way. Your job as a founder isn’t just to sell a portion of your company, it’s also to identify whether the investor is someone you want to work with. This principle applies equally to customers, influencers, and employees, as well. Remember: both parties are making a sale. You’re just as valuable to them as they are to you, you just have to realize it and close the sale.
Interested in learning more about selling at Seed and Series A companies? Follow my blog at https://www.thesalesmethod.com/resources/ or twitter @thesalesmethod. Upcoming articles include an interview Hiroshi Wald, partner at Austral Capital on successful partnerships and what to look for in a partner.