Jedi Mind Tricks to Win Investors

We’ve devoted plenty of time on this blog to look carefully at the idea of developing and deepening investor trust. I encourage you to continue to review these posts and to apply the principles I’ve shared because they work. For those who haven’t spent much time reading my posts on trust, please do yourself a big favor and read them!

The entire body of my material on trust can be found here.

Today, I want to add something new to the issue of investor trust. Up to now, I’ve focused the trust conversation around three major principles:

  1. Establishing trust when you first meet a potential investor;
  2. Deepening trust as you develop a relationship with that investor; and
  3. Maintaining a trusted relationship with your investor over time.

Today, we’ll add a fourth element, which acts as an overlay to the other three, by probing the unconscious mind of an investor.

We’re going to answer the question “who do investors trust?”

I’m going to start by answering that question directly, then probe the reasoning behind it.

So, who do investors trust?

Investors trust people who they recognize unconsciously as those who’ve made money for them in the past.

It’s largely an unconscious process, which is why most investors don’t reveal their true reasons for saying “no” to you. They have no idea themselves because the reason is mostly grounded in pattern recognition processes occurring at the unconscious level of their minds. Research in this field demonstrates something very important to those seeking investment capital. It turns out that when people face complex decisions, such as buying a house or, yes, making a business investment, they often make decisions using their intuition, or gut instinct. Such decision-making bypasses the neocortex of the brain (where rational thought resides) in favor of the pattern recognition processes of the unconscious mind.

When it comes to investing in innovation, the pattern recognition we’re discussing is part of the ancient fight-or-flight mechanism of our brains, what we’ve referred to in prior posts as the “crocodile brain.” This part of the brain houses a vast reservoir of personal past experiences, perhaps even species-wide experiences. Human beings draw upon this reservoir of past experiences to recognize “good” from “bad” actors, then make decisions from that data. But again, this is not a conscious, rational process. In other words, it’s not a product of assessing data in a rational way but is grounded in unconscious recognition.  This recognition is experienced as a “gut feel” about a particular decision.  Then, since modern human beings are dominated by neocortex rational thinking, we will often come up with so-called “reasons” for decisions that we actually made in a completely unconscious manner.

For example, deep in your past perhaps you had a very unpleasant experience involving someone that wore glasses, had a mustache, brown hair and was dressed in blue jeans. You’ve long ago forgotten the experience. Now, forty years later, you are considering investing in a business based on the tip of a colleague. You show up for the meeting with the business owner and there he is, wearing glasses, a mustache, brown hair, and jeans.  I’m simplifying, but you get the point.

You don’t even know this person. He’s come highly recommended by a colleague you trust. But something doesn’t feel right. You can’t put your finger on it, but you just don’t feel comfortable with this guy. You can’t even hear his pitch, because your crocodile brain is screaming “Run!” As soon as possible, you make your excuses, thank him for the meeting, mention that you’re just not liquid at the moment and get out the door.

Now you can understand why investors often don’t know why they’ve said “no” and fall back on the “pat” answers.

This sounds very problematic, doesn’t it?  Well, the real problem is that it’s not (usually) about appearances.   It’s about much more subtle signs — mannerisms, style, attitude, body language, the tone of voice and aspects of your character — what we sometimes call “ways of being.”

How are you supposed to know in advance what unconscious mind patterns an investor will recognize in you and, even if you knew what they were, how would you overcome them?

The good news is that there are answers to these questions. I’m going to answer them for you right now.

First, you have to look the part. Don’t believe the movies you’ve seen or the history you’ve read about precocious, grungy, oh-so-smarter-than-thou youths getting millions of dollars for start-up companies. This is not 1999. I don’t want to be the bearer of bad news, and there are exceptions, but the following should be jettisoned for both men and women:

  • face tattoos
  • face metal and piercings other than conservative ear piercings
  • facial hair (sorry guys!)
  • non-natural hair coloring

You never know what will trigger an investor’s crocodile brain, but you are far more likely to trigger it when you look very different from the kinds of people with whom they regularly do business and with whom they’ve had past success.

Second, you have to speak the part. By speaking the part I mean dancing in the conversation with investors in a way that establishes, then builds trust.  But how exactly?  George Kenney and I reveal this information in the Entrepreneur’$ Boot Camp, as well as in our other trainings and consulting. It’s not something we just made up. It’s based on the years of research and the thousands of conversations with investors which enabled us to define investor patterns: mind maps, if you will. Investors revealed their mind maps to us through a detailed set of conversations, allowing us to understand what investors are thinking, but rarely saying, in their conversations with entrepreneurs.

Now we get into the deeper, not so obvious stuff.  How do you make sure that your investor “recognizes you as the person who makes them money?”  This is deeper than “looking like” such a person or even “sounding like” such a person.  It is experienced as true recognition, almost as if the investor is asking the question unconsciously “Where have I met this person before?”

Of course, you can’t know the specifics of the particular people that have made any one investor money in the past.  But you can ask them to describe such a person, and then mirror those attributes.  What you’re looking for here are character traits or ways of being. Perhaps this particular investor has always made money investing in Type-A, “just do it” entrepreneurs who work 100-hour weeks and live in their offices. Perhaps they’ve made money with charismatic leaders who portray confidence above all else. Perhaps their biggest successes were with hard-working, but modest scientists or technocrats who know their material to the “nth” degree.  You’ll have to find out.

Ferreting out this type of information isn’t as difficult as you might think. Why? Because people generally love to share their successes. Also, as we’ve discussed in prior posts about trust, being interested in the investor, truly wanting to know about his life, his successes and accomplishments is a great way to develop initial trust. This is not being phony or being an actor.  This is expressing outwardly that part of yourself that would be familiar to this investor.

At the end of the day, we all have unconscious pattern recognition threads running. We can’t know with 100% certainty what is running through the mind of the person with whom we are meeting. But, if we mirror them to the best of our ability, we can at least increase the odds that we won’t trigger the “Run!” reflex in an investor’s brain.

These four points may seem like Jedi Mind Tricks to you, but trust me (really), as an investor, if you combine all four, you will see funding results!

Key Takeaways:

  1. Trust is the most important element of the entrepreneur-investor relationship.
  2. Unconscious patterns in an investor’s mind can make establishing trust more difficult, because neither you nor the investor, is aware of what will trigger their “Run!” reflex.
  3. You can increase the odds of a positive outcome if you mirror the attributes that map to past successes that investor has had.
  4. To do that, ask the investor to describe the traits that those people had, then do your best to mirror them.

 

Robert Steven Kramarz

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