Tackling Tough Investor Comments: 20+ Approaches for Startup Founders

Are you seeking investors for a startup business? Are you concerned about how to deal with their tough comments and demands?

Tough comments require a soft but firm approach! And you need to have effective phrases ready to go!

Below are a few general approaches and several specific responses for common situations.

GENERAL APPROACHES

Here are some general approaches to responding to a tough comment:

• Don’t rush to answer: take a breath, hold your eye contact (or if on a video call, continue looking in the lens), smile right before responding (unless inappropriate)
  
• Open with something positive/innocuous: “Interesting . . . “
  
• Repeat, rephrase: “So, what you’re saying/concerned about is . . .?”
  
• Confirm understanding: “Have I got that right?”
  
• Get more data/ask clarifying questions: “Tell me more about why . . .”
  
• Empathize, if possible: “I can understand/see your viewpoint . . .”
  
• Agree on some aspect of the concern, if possible: “I, too, am concerned about . . .”
  
• Agree on a bigger picture  and  get them thinking about the potential (minimize the issue they are concerned about)
  
• Reverse empathy “If you were in my shoes . . .” Ask them how they would feel in your position (let them know why you have the stance you do)
  
• Broken record tactic: “I understand your position, but I will still . . .” (repeat as needed)
  
• Partner, if possible, “How can we move forward . . . ?”

If the Issue remains divisive:

• Pause the discussion on the issue and move on to a topic of greater agreement.
  
• Agree to revisit at a later date.
  
• Agree to disagree
  
• Agree to part ways, at least for now.

SPECIFIC PHRASES

Addressing Concerns Without Being Defensive

Addressing concerns without being defensive requires active listening and a willingness to understand the investor’s perspective. Here are some phrases you can use to address concerns in a non-defensive way:

1. “That’s a valid concern. Let me explain how we are addressing that issue…”
   
2. “I understand why you might be worried about that. Here’s what we have done to mitigate that risk…”
   
3. “I appreciate your feedback. We’ll definitely take that into consideration as we move forward…”
   
4. “I can see why you might have that perception. Let me clarify…”
   
5. “Thank you for bringing that up. I think it’s important that we address that directly. Here’s how we plan to do that…”

By acknowledging the investor’s concerns and offering solutions or clarifications, you can address their worries without becoming defensive. Remember to stay calm, listen actively, and focus on finding a collaborative solution that works for both parties.

Pivot to Focusing on Your Strengths

Here are some phrases you can use to focus on your strengths and emphasize your team’s experience, your product’s unique features, or your market traction during negotiations:

1. “One of our key strengths is our team’s extensive experience in the industry, which gives us a unique advantage in developing innovative solutions.”
   
2. “Our product’s unique features, such as [feature], set us apart from our competitors and create significant value for our customers.”
   
3. “We have already achieved significant market traction, with [number] of customers and [percentage] market share, which demonstrates the potential for further growth and success.”
   
4. “Our team’s track record of success and proven ability to execute, combined with our innovative product and growing market demand, positions us for strong growth and success.”
   
5. “Our competitive advantage lies in our ability to [unique strength], which enables us to meet customer needs more effectively than our competitors.”

By using phrases like these, you can highlight your strengths and showcase your competitive advantage, which can help build confidence in your ability to succeed and create value for investors.

Negotiating Ownership or Profit Percentages

Negotiating ownership or profit percentages can be a sensitive issue, and finding a fair and mutually beneficial solution for both parties is important. Here are some phrases you can use to negotiate with an investor who wants too high a percentage of ownership or profits:

1. “While we appreciate your interest in investing, we believe that your proposed ownership/profit percentage is too high for the current stage of our business. Can we discuss a more reasonable percentage that would be fair to both parties?”
   
2. “We understand that you are looking for a significant return on your investment, but we also need to ensure that we maintain enough ownership/profit to make the business viable. Let’s explore options that balance both of our needs.”
   
3. “We value your investment and expertise, but we also want to ensure that our team and other investors have a fair stake in the company. Can we discuss alternative terms that would allow us to work together while maintaining a fair distribution of ownership/profit?”
   
4. “We’re open to exploring different ownership/profit structures that align with our long-term vision for the company. Let’s work together to find a mutually beneficial solution that allows us to grow and succeed together.”

By using phrases like these, you can communicate your position in a respectful and collaborative way, while also advocating for your own interests. It’s important to stay firm but flexible, and to focus on finding a solution that works for both parties.

Practice these phrases, adjusting them to how you speak, so they are ready to use when the situation arises!