5 Ways to Handle Startup Investor Objections

Investor objections are a common hurdle to overcome for startups. Here are five ways to handle them!

1- Preemptively address investor objections

While it may seem counter-intuitive, the best way to handle investor objections is to preemptively address them. Think about what the objections investors could have about your startup- this include things like having a solo founder, too many founders, an unfinished product, not moved from idea stage, or having an market that is currently suffering. Then work on answering that objection before it comes up.

Spend 15 seconds talking about the industry and 45 seconds dispelling the potential objection as you talk. Back your points with data and be transparent and truthful.

2- Point them to data

For example, say you have a startup in an industry that isn’t currently fairing well due to fears of recession. You can point the potential investor back to the trends after the financial crisis of 2008 to show that industries affected by crisis bounce back over time. If your industry itself didn’t fair well after the recession, you could find data how the world has changed over the years and how the market itself is evergreen.

3– Use a sales approach

Handle investor objections with a sales process approach. Treat the situation as though you are selling to them rather than giving an elevator pitch. This reframes the discussion as a conversation where both parties are communicating, rather than a single-sided bid for an opportunity.

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4- Point them back to what you’ve said

Countering objections before they materialize allows you to not only show that you’ve already considered the objection, but are confident as to why it is not a problem. This ensures that all you have to do once your initial sales pitch is over is point them back to your thorough understanding and treatment of the concern.

5- Limit back and forth

Try to limit back and forth as much as possible. Since you’ve already handled objections, if one comes up in the ensuing conversation, simply point the investor back to what you previously said. You’ll want this to serve as a deterrent for the investor to bring it up again. You don’t want them to feel stupid, you want to feel as though you’ve thought of everything and they are in safe hands.

Working with investors can be daunting, but knowing how to psychologically navigate negotiations can set you up for success!