We were recently approached by a potential new client, who wanted feedback on his pitch deck, a rewrite and assistance with reaching out to the appropriate investors.

We liked him and his product and decided to take him on as a client.

An investor friend called us a few days later, and asked what we were working on, meaning was there anything in our pipeline that might be of interest to him and his fund. We gave him the broad strokes on the software that our new client had built, and which already had some traction in the market, knowing full well that it was in his sweet spot.

“Interesting,” he said, “but I attended a pitch event yesterday and saw something very similar. The product isn’t in the market yet, but this software is capable of doing much more than what your client seems to have – and they’re in the same space.”

He went on to tell us about this potential competitor, which not only had workplace implications, but could detect certain medical issues as well.

We were fascinated.

He went on to tell us about the brilliant founder who had pitched, whose company was very early stage re no customers/traction, re no go-to-market strategy, from our point of view. Still, he warned us, be aware that this is out there, or could be very soon, and could potentially be very strong competition for our new client.

Given what he’d told us – the multiple markets this product could tackle and the lack of customers, seemed to us like a product in search of a focus.

There were seventy or so investors present for the pitch, and we asked how many had expressed interest in investing or was his fund at least considering it.

None that he was aware of, and no, they weren’t.

“Pourquoi pas?” we asked.

The founder fell apart during the Q&A and couldn’t clearly answer any of the questions the investors had about the business itself, and trust us, investors always have questions.

Especially about the business itself.

Rather than answering the questions, the founder would revert to talking about the tech and its possibilities. All well and good, but that part of the presentation was over. And as we’ve said many times, investors are not your customers: they’re the people who could potentially fund you, and they want to know about the return on their investments. They understood that the tech had social and medical benefits, but at some point, founders have to get down to brass tacks: how are you going to make money, and what/where’s the exit?

We often talk about pitch decks and the points you need to cover/story you need to tell, but when you’re in the meeting with investors, you’d better be able to address their questions as to the business side of your business. The term ‘startup’ has always somewhat bothered us. We’d prefer the term ‘newco,’ as this is a new company, a business, and ‘startup’ somewhat reminds us of a term realtors use for people who constantly look at properties, and never pull the trigger: playing dolls.

Before you get to the investor meeting, you’d better know your business inside and out, your competitors and what their superpowers and shortcomings are – because the investors will know, trust us.

Brian Cohen, former Chairman of the New York Angels and now founder, New York Venture Partners spoke at one of our Investor Breakfasts a few years back (and is speaking again this week, fyi)  and told the attendees that once you’ve been invited to present to an investor, that you own the room and that it’s your to lose. The job of an investor is to deploy funds, and preferably bring the LPs in the fund a return on their investments – which is what inspires LPs to write the check when it’s time to raise the next fund. In other words, funds are like newcos: it’s a business, and preferably, a highly profitable one.

Said founder our investor friend mentioned was not ready to launch a business. He clearly didn’t understand that the business side was very much part of the equation, and hopefully there was someone on his team who did.

And who should have been at the presentation to answer those questions.

So, heads up, founders, and keep in mind that the pitch deck might get you the meeting, but once there, you’d better be able to literally get down to business once you’re in the room, virtual or not, and you’d better know your business on a granular level. It sounded to us as though this founder hadn’t considered that he was building a business and at this point, to the investors at least, he was doing little more than playing dolls, at best.

We know you’ve heard this a million times, so once more with feeling: investors invest in the team. It’s all about the team. Investors literally bank on the founders as much if not more than the premise of the company or the tech itself: it’s the founders who’ll take them to the finish line – and preferably in first rather than last place. Onward and forward.