What is the right fundraising mindset for founders?

The right fundraising mindset combines serious preparation with a light, confident attitude in the room. You know your numbers and your story. You meet investors as a business partner at eye level. And you walk into every meeting convinced that the round will happen.

Each of these three parts can break under pressure. Some founders treat every investor meeting like a final exam and lose their focus. Others ask for approval and send signals of dependence.

Why does stress hurt founders during fundraising?

Long periods of stress impair memory, creativity and decision-making, and a fundraise needs all three. When you approach fundraising like a high-stakes job interview, your amygdala becomes active. The amygdala is the part of the brain that processes fear. It triggers a stress response, often called fight or flight, and floods your body with the stress hormone cortisol. Short bursts of cortisol can sharpen focus. Prolonged stress works against you.

When you treat the same task as a game, your brain enters a play state. In that state, the prefrontal cortex is active: the part of the brain responsible for strategy, social interaction, creativity and problem-solving. Games also increase dopamine, a messenger substance in the brain that supports motivation, pattern recognition and optimism. The neuroscientist Andrew Huberman emphasizes that the brain handles stress best when it comes with a sense of control and curiosity. Both grow when you see a situation as a game rather than a threat.

A game mindset still includes professional preparation. It brings curiosity instead of fear, resilience instead of perfectionism, and learning from every meeting instead of pass-or-fail thinking. In CEO Briefing #66, I described five ways to apply it:

1. Levels: treat each investor meeting as a level in a game. You learn something new every time, even when the answer is no.
2. Tough opponents: some venture capital investors (VCs) will be hard on you. Like the strongest opponent at the end of a video game level, they are part of the game.
3. Visible progress: track rejections, learnings and wins. Progress you can see keeps your motivation up.
4. Your best tools: use storytelling, social proof and data. Social proof means signals that others already trust you, for example existing customers.
5. Team play: talk to fellow founders and share tactics with them.

Why do needy signals push investors away?

Needy signals tell investors that you depend on them, and that weakens your position in the conversation. I once saw a pitch deck that ended with the fundraising ask under the title “Support us”. Those two words turn a business proposal into a request for help. They can make investors forget the strong story the deck told before.

You are looking for a business partner at eye level. Investors need great investment opportunities, because money they do not invest earns them nothing. In that sense, VCs need you as much as you need them. It helps to see VCs as vendors of money and to check them as carefully as any important supplier, in a friendly and kind way.

On the ask slide, state how much you are raising and what you will use the money for. Leave out calls to action such as “Support us”, “Join our round” or “Join us on our journey”. At that point you do not yet know whether this investor is the right partner for you. You find that out in the conversations that follow. CEO Briefing #25 explains the slide in detail.

How much does founder conviction influence investors?

Research suggests it matters a lot, especially at early stage, when investors bet heavily on the founder. The management researchers Laura Huang and Jone Pearce studied how angel investors decide whom to back. Angel investors are private individuals who invest their own money in young companies. One investor told them: “Sometimes I can tell within five to 10 seconds of meeting somebody whether or not I'm going to invest in them.”

Part of what investors read in those first seconds is how convinced you are of your own company. Three more studies show what else moves the decision:

• Passion: Paul Gompers and his co-authors surveyed 885 venture capitalists on how they pick companies. Passion, the energy a founder brings, is among the team qualities they value most, next to ability and industry experience.
• Preparation: in a 2009 study by Xiao-Ping Chen, Xin Yao and Suresh Kotha, 55 experienced investors judged founders at a business plan competition. What moved their decisions was the substance of the plan and the quality of the answers.
• Answers to risk questions: the researcher Dana Kanze and her co-authors analysed the pitches of 189 startups at the startup conference TechCrunch Disrupt in New York, between 2010 and 2016. Each additional question about risks went along with 3.8 million dollars less in funding. In follow-up experiments, founders who answered risk questions by talking about growth received more money than founders who kept defending.

Energy makes the room listen. Preparation makes that energy believable. A founder with conviction answers a risk question and then takes the conversation back to where the company is going.

What is irrational confidence, and why do founders need it?

Irrational confidence is the choice to believe in a positive outcome while the evidence is still incomplete. Jan Sessenhausen, Partner at the venture capital firm Cusp Capital, described it in an episode of my DEALMACHER Podcast. For over 11 years, Jan was the only VC involved in the pre-selection for “Die Höhle der Löwen”, the German TV show in which founders pitch to investors. His definition:

“Irrational confidence is when you ignore your own doubts and deliberately block out critical questions – because you choose to believe in a positive outcome.”

Jan compares it to professional basketball in the NBA, the North American league: “In the NBA, the average field goal percentage is below 50%. But every player shoots like it's going in.” Fewer than half of all shots score, and every player still shoots with full belief.

This kind of confidence still includes knowing your risks. In CEO Briefing #96, I collected five ways to build it:

• Pitch the change: talk about what your product makes possible in the world, beyond the code.
• Customer feedback: anchor your belief in real users. One real, emotional testimonial can carry more weight than 50 cold metrics.
• Repetition: say your pitch 100 times, to internalize it rather than to memorize it.
• People who build: spend your time with people who act, more than with people who only analyse.
• Selective ignorance: know your risks, and set them aside in the key moments.

How do you build conviction before an investor meeting?

You build conviction before you walk in, with repetition, an alter ego and a written story of the round. My rule: never walk into an investor meeting to find out whether the investor likes you. Walk in with 200 percent conviction that the round will happen. The only open question is whether this investor wants to be part of it. In CEO Briefing #129, I described three tools I use with founders:

1. Repeat your core messages: write down the core messages of your company and repeat them until you know them by heart. In the meeting, say them in your own words, fitted to the question. Tobi Lütke, the CEO of Shopify, used the same principle on his fear of public speaking. For a week, he spent ten minutes a day writing down that he loves public speaking.
2. Build an alter ego: an alter ego is a version of yourself with its own name, built for moments where a lot is at stake. Mine is Alexander, the super-dealmaker version of me. İskender is the Turkish form of Alexander. Give yours a name and the traits you want to bring into the room.
3. Write down how the round will go: before the round starts, write a short story of how well you will perform in it. Describe the meetings, the hard questions, your answers and the term sheets, which are the written offers from investors. Then read the story again and again.

Research supports the alter ego. Rachel White and her colleagues gave 180 children aged four and six a boring ten-minute task, with a tablet game next to it as temptation. The children who pretended to be someone else, Batman for example, kept working longest. In one of seven studies by the psychologist Ethan Kross, participants who talked to themselves using their own name instead of “I” gave speeches that judges rated better. In further studies, people who used their own name saw the upcoming task as a challenge rather than a threat.

Prepare the substance as well. Work out your answers to the hard questions before the meeting. Conviction without substance can read as arrogance, and it breaks in due diligence, the detailed check investors run before they invest.