If Conversion Is Under Half, Fix Yourself First

Continuing from the last piece. After a dense run of investor meetings, how do you know whether you did it right?

Our view, up front. We watch one number: once the right investors have been screened, term sheet conversion should clear half. A TS is a term sheet, one page setting out the price and the main terms. Clearing half is what we ask of ourselves, not a figure read off a statistic. It is not a low bar. Why? Two layers below.

Below Half, Go Back and Change Something

The market is not wrong. An investor's reaction is the most honest data in this business. He did not go further today, and he may not be able to say why out loud, but the behaviour has already given you the answer.

So where does it stick, below half? In two places. First, the profile is off. Second, the story does not stand.

The profile first. Fundraising is really an A/B test. A project has many bright spots, and piling them all on means having no point at all. What works is to use the first three to five firms as a sample: find which single point actually drives the decision, work back from it to the buyer profile, then approach only people who fit that profile and tell them only that point. Converge first, spread later. So for the first three weeks of the sixty we mostly stay indoors looking for the key rather than rushing to the table. A wide net always converts badly.

Now the story. When a story does not stand, the fault is rarely the phrasing. When an investor asks about positioning he is not asking how the market is divided; he is asking what the founder understands his own boundary to be. The moment the answer contains "we do this too, and that too", the trade-offs are unfinished. In a company with unfinished trade-offs, resources get spread evenly across everything that does not matter. One sentence, and the other side walks.

Both of these can be changed. Change them, then go out again.

What Holds the Loop Together Is the Beat of Review

A short review after every meeting, a full review the same day, a strategy review every week.

Why must it be the same day? Because the shelf life is one day. The most valuable thing in a meeting is often not the conclusion but the word he picked while hesitating, and the order in which he pressed his questions. By the third day, memory has compressed those details into "they were not interested". That sentence carries zero information. Settle it the same day and the next meeting gets a corrected way of telling it. When the beat is tight, once a week is not enough. Every meeting has to recalibrate the profile, and you go fishing where the fish are.

The line in the Archive — at the precise moment, take the most decisive and most correct action — comes down on the ground as this beat. Technology advances continuously; capital markets price in jumps. Jumps mean windows, windows are often only a few weeks, and the gap in perception has to be closed inside them. So review is not an annual ceremony. It is what regulates the tempo. Keep the beat going and the direction will not drift for long.

The boundary should be stated too. Conversion is a process metric, not a verdict. For some companies the window was never open, and ten meetings are no different from twenty. We accept that. But being willing to set the ruler against the outcome and revise round after round is what we understand the word "service" to mean. Only someone willing to work in-house, and willing to put his own capital in — skin in the game — can do this sum properly.

Before any of this begins there is an earlier checklist. The next piece is about it.