Mon, 23 January 2023
Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.
Anchoring is a cognitive bias defined by Wikipedia as the tendency to rely too heavily, or "anchor", on one trait or piece of information when making decisions (usually the first piece of information acquired on that subject)
Investors tend to attach to the first thing startup pitches and stick with it.
If the startup positions its deal as a service such as providing education technology, investors will view it as an ed-tech service.
On the other hand, if the startup positions their deal as a software as a service business, investors will home in on recurring revenue streams and will look for metrics in that category.
How you position your business at the beginning of the pitch is how most investors will look at it throughout the pitch.
Consider positioning your deal upfront for the investor audience you have.
Position it as an ed-tech service for investors focused on education.
Position it as a software-as-a-service deal for investors focused on recurring revenue.
Position it as a social impact deal for investors focused on impact investments.
Don’t fight the anchoring effect by mispositioning your deal for the investors you are pitching.
Use anchoring to connect your deal with the investor.
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