How to Show Investors You Can Execute

At the early stages of your business, there may not be much to show for your hard work. Typically, you are pre-revenue, not yet regulated, and lack sufficient data to provide investors with a comprehensive analysis of your future direction.

When it comes to investing, you often face rejections from investors who claim that you lack sufficient revenue or haven't reached the right milestone. While this may be true in some cases, many investors have invested in companies with even less traction than yours.

Why is that? Because ultimately, your ability to execute your goals determines your success.

Some founders try to address this issue by citing random market reports in their industry or company, while others complain that investors only care about traction. Both of these approaches are incorrect. It's not about your company causing you to be rejected, and it's certainly not because every investor invests at certain revenue levels.

Traction and execution encompass more than just revenue. Regardless of the reason for an investor's rejection, it often comes down to their lack of belief in your ability to execute.

So here’s 6 tips to show investors that you are an executer:

1. Show traction

This may seem obvious, but traction goes beyond just revenue. Often, founders at the pre-seed or seed stage focus so much on revenue that they overlook the other important aspects of their progress.

For instance, how many customers have you spoken to in order to gain unique insights? How many people have signed up for your waitlist? What kind of innovative technology have you developed that sets you apart from other companies? How quickly have you adapted your product based on customer demand?

There are numerous indicators of traction that can demonstrate to investors the significant amount of work you have accomplished. When considering these indicators, it is crucial to focus on the ones that lay the groundwork for future scalability.

For example, I once assisted a company in raising $1 million in a pre-seed. At the time we worked together, the company hadn't even been incorporated yet. The founders were creating a friend-to-friend betting app and instead of emphasizing revenue (which they didn't have, of course), they highlighted the fact that they had amassed 2,000 people on their waitlist and that 500 people were using their minimum viable product (MVP) on a daily basis.

They demonstrated to investors the progress they had made during the four months of beta testing and the rapid increase in usage. After the investment, I spoke to a friend at the fund that led their round, and asked her why they decided to invest. She explained that it was primarily due to the traction they had achieved even before the company was officially established.

2. Be data-driven

Although your business may not have gained full traction yet, it is crucial to demonstrate to investors that you possess the knowledge and capability to collect the appropriate data.

By showcasing your data-driven approach in measuring and tracking the right data points, you can assure investors that when traction is achieved, you will accurately measure the relevant data and make necessary adjustments as needed.

A great example here was a founder we invested into at my old fund. He hadn’t got revenue yet, in fact, they hadn’t even built out the production plant. However, with their own experience building something similar before he gave us everything they had already sorted (it was a lot), the step-by-step plan of what was next with extra levels of attention to detail, and reassurance that it was simply going to be a flip of a switch after investment before everything was in order.

Within 2 months of investment they had done everything, and now this company is making 10s of $million. We invested into them because of their data-driven approach.

As you can see this wasn't about chucking as much data at our face, but rather showing us they were collecting and measuring the right data to mean they will succeed. This is what I want you to do.

3. Be communicative

An investment is never the end of the road for the investor; it is merely the beginning. Investors expect a potential 10-year journey with you and want to see that you can communicate effectively.

Unfortunately, I have seen many founders fail at this crucial step. Instead of focusing on how well they communicate, they get caught up in the transaction of securing an investment.

To impress investors, it is important to follow up quickly, be honest, and demonstrate clear communication skills. This shows them that you are capable of executing tasks swiftly while providing them with the necessary data and knowledge.

Effective communication is a fundamental trait of a successful executor, and investors are actively seeking this quality when assessing your suitability.

4. Be collaborative

If you want to execute in the right manner you have to be collaborative. This is with your investors as well as your employees and stake-holders.

Without having this type of collaboration at the front of your mind, investors know you will not execute in the right manner, nor will they be able to help you execute.

It’s why its so important to show the processes you have to collaborate with your colleagues and how this has caused certain improvements in your business since you started.

5. Create an aligned team

To effectively execute your business strategies, it is crucial to ensure that every member of your team is aligned and working towards the same goal. Unfortunately, this aspect is often overlooked by many companies I have observed as an investor.

For many of the companies I saw and worked with, team members often pursue different goals, resulting in conflicting methods and decisions. This lack of focus within the team can lead to poor execution, slow action, and ultimately, failure. This is common for an investors portfolio company and something they are looking out for when they try and find new companies to invest into.

Investors recognize the significance of team alignment and consistently evaluate it. To address this, it is essential to establish a clear goal and vision for both the short and long term. Show investors how each team member actively contributes towards these objectives.

6. Focus on problem solving

Throughout your journey to success, you will encounter numerous challenges. Essentially, running a business entails tackling these challenges to find solutions.

Most founders struggle with problem-solving, and even if they possess the skill, they often fail to effectively demonstrate it to investors. I recall a meeting in 2019 where I was impressed by a founder's approach to problem-solving within their team. They showcased the process and highlighted the problems they had successfully resolved, resulting in increased user engagement and team productivity.

This type of work is what excites investors.