An entrepreneur asked me a great question last week:
When is it OK to say I don’t know in a pitch meeting?
I told her the following things:
1/ This varies from investor to investor. Some investors are looking for founders to have all the answers.
2/ I am not one of those investors but I do want the founders to have some of the answers.
3/ If I asked her how large and valuable her publicly traded competitor is, and she said “I don’t know but I will find out and get back to you on that”, I would be fine with that answer.
4/ If I asked her what the tech stack is that her engineering team is using to build the product, I would be dissapointed if she didn’t know that answer.
In general, I believe it is critical that the founder be knowledgeable about all the details and aspects of the internal operations. They should have those answers on the tip of their tongue. That includes things like monthly burn, cash balance, headcount, etc.
And if you don’t know the answer to the question, you should be honest about it and say that you will get it and get back to the investor. And do that quickly.
Sometimes investors ask ridiculous questions and then you have to bite your tongue and be polite.
I will end with a great story. It was 1991 and we had seed funded a brilliant software engineer who was building a product for the wall street sector. I took him to see a very prestigious VC as we were looking to fill out the seed round. The company was maybe six months old and was not yet in market with the product.
The entrepreneur started in on the market, the opportunity, and the product. Maybe three or four minutes in, the VC interrupts the founder and asks, “what will your revenues and profits be next year and the year after?”
The founder was pissed. He had not even gotten to the product they were building and he was annoyed by the interruption and the question.
So he answers in his broken English “I don’t have a fucking clue.”
Our meeting ended several minutes later and we were shown the door.
We did not secure an investment from that VC but the company was successful and went public five or six years later.
So you obviously don’t need to have all of the answers in a pitch meeting to be successful. But you do need to be polite and respectful if you want to secure the funding. And there are some things you absolutely need to know the answers to.