Imagine a meeting room in a hotel. You’re an entrepreneur talking to five potential investors. You present their new business with a slide presentation. This is your pitch.
The pitch goes perfectly well until it gets to the financial projections. They’re bad. They are embarrassingly over optimistic. They cast doubt over the entire presentation.
So, when the investors question the financials, how do you respond?
The wrong answer: blame the financials on the outsider who did them. Take no ownership and no responsibility. Do you realize how bad this makes you look?
The right answer: Acknowledge the problem and ask for as much information as the investors are willing to give you about what’s wrong with them. Promise a thorough revision as quickly as possible. If you can – use good judgment, this might not be appropriate – suggest that unrealistic financials are a lot easier to fix than poor product-market fit or a less-than-stellar management team.
Isn’t it obvious why one is better than the other?