Investors smell desperation, but there is a way to increase your bargaining power, even if you really want someone to put money into your business. “Calendar density” is one of the keys, said Brian Requarth to The Brazilian Report‘s editor-in-chief, Gustavo Ribeiro.
They held a panel on “What VCs [venture capitalists] don’t want you to know,” at Web Summit Rio 2024 on April 17. Mr. Requarth founded Latitud and VivaReal and has experienced both sides of this world, as a founder and an investor.
According to him, lining back-to-back meetings during a two-week period, for example, and establishing hard stops for your meetings conveys an “aura” to investors, communicating that you are busy and have many options to get the best fit.
Gustavo Ribeiro also asked him about issues such as what entrepreneurs tend to be excessively concerned with and what they should pay more attention to when trying to raise money. The impact of cultural differences on negotiations was also an interesting topic of the conversation.
In Mr. Requarth’s view, North American founders tend to be much more aggressive in their statements to VCs than Latin Americans.
He thus gave a tip for the audience in Rio: “I’m not encouraging you to inflate anything, but be bold — and be grounded at the same time — but don’t be afraid to be audacious with your statements and what you’re going to achieve.”
Most investors, Mr. Requarth said, will probably assume that entrepreneurs are usually too optimistic, and will reduce the values they project by about 20 percent — something that can kill a proposal from someone too realistic.
As he pointed out, VCs can easily notice when a founder is unrealistic. Being a grounded negotiator, however, involves considering that winning investors’ hearts and minds demands much more than hard numbers and projections. Start by “being likable,” advised Mr. Requarth.
Check out the conversation in full below:
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