A flying instructor once told me that good pilots fly with humility and finesse.  No matter how skilled the pilot, changing weather conditions may require a different course or even a delayed take off. 

Investors know your projections present the best case, sunny skies scenario.   I know of one early stage investor who automatically cuts projected revenues in half, doubles expenses and increases the time it takes to get the proposed product to market.  While this exercise is extremely frustrating to entrepreneurs, the investor’s real objective is to test the management team’s mind-set.  

As the pilot of a new enterprise, you should expect turbulence in the form of key partners taking longer to say yes, large customers holding up payments needed for payroll, or new lower priced competitors entering the market with a lot of advertising support.  Simply stated, anything can happen to make your projections obsolete.

Think about this for a moment.  You are asking investors to join you on an entrepreneurial ride with their money at stake.  You are their pilot.  What matters to them is not how well you prepare the projections today – the equivalent of the pre-flight plan.  What matters is your willingness to adjust to conditions and ask for guidance along the way.  They are dependent on your good judgment.

Investors want to work with management teams that don’t rely on absolutes but have the emotional maturity to look at problems with an open mind.  To gain confidence, they need to see signs of your own flexibility and humility.

In your enthusiasm to defend your projections you may have given the impression that you are a solo flier.  During investor presentations, your best posture is to acknowledge investor concerns about costs and revenue growth.  Don’t debate too hard.  Rather, agree that problems will occur and provide examples of how you managed unexpected challenges in the past and got the business back on course.

Focus attention on what is needed to reach your company’s next operating milestone.  You might say, “This is our budget based on what we know about our industry today.  We believe that $2 million will get us through product development and the initial the product launch.  Then we can assess what resources will be needed to build further.   If we need more money, then that’s a decision we’ll all make together.”

You can also add credibility to your presentations to the extent you can point to other companies that have deployed similar cash-saving operating tactics to gain impressive revenue growth.

Here’s one last tip.  Just as my old flight instructor had thousands of hours flying in good weather and bad, most experienced angel investors and many venture fund managers have previously run successful businesses. You can learn from them.   The more you demonstrate a genuine willingness to work with them, the more they will want to work with you.   You can do it.