Guides · Investor psychology and trust

How to Read an Investor's Buying Psychology Before You Pitch

Most people walk into an investor meeting and start talking. They have a deck, a script and a long list of facts. What they don't have is any read on the person across the table.

I have spoken over 750 times, including 300 events of our own at Family Office Club. I studied the psychology of influence for well over a decade. Here is how I would read an investor before I pitch, using what I have seen work.

Step by step

Step 1. Get clear on yourself first

Before you read anyone else, read yourself. I studied influence and persuasion for well over a decade, and my view is that the most influential thing you can do is learn to influence yourself. If you try to influence other people and you don't look like you have your own act together, nobody listens. So get clear on where you are going, what you are doing and what you put up with. Pick a niche and stay in it. You can't be an expert in 19 things. Focus makes you look credible before you say a word.

Step 2. Find what makes them lean forward

Investors pay attention to what is unusual. Chip spoke at our event after raising $7.5 billion for clients. He said he was representing a product he had never seen before, and right away everyone leaned forward. Your goal is the same. After talking to any investor, you want them to say they have never heard anyone doing that before. Then explain it in one simple sentence. Chip described a company that, as he presented it, invests in treasuries and adds an option strategy. Write your one line pitch and watch for that reaction.

Step 3. Attract instead of chasing

Pay attention to how an investor responds when you teach versus when you pitch. Jack, in the mobile home park space, had raised $5 million. He read our book on capital raising and changed one thing. Instead of pitching his deals, he started talking about the industry and why he liked it. Then he raised $55 million. His last deal raised $5 million in 72 hours. That is reversing the psychology, attracting instead of chasing. If investors lean in when you talk about the industry, you are reading their interest correctly.

Step 4. Ask questions before you pitch

Most people go into a meeting and pitch the whole time. They don't ask questions and they don't customize the pitch. They go into robotic pitching mode, which is not very effective. Do the opposite. Ask a lot of questions, because it builds the relationship. Brad described a meeting with a bank where there was a discovery process first and then an eight page proposal. Discovery comes first and the proposal comes second. Use what you hear in the answers to shape what you say next.

Step 5. Add value before you ask

Reciprocation is a principle of influence. You help someone, and they want to help you in return because you added value first. One way to do it is to email investors the 19 things to look for when doing due diligence on a dry cleaning investment. Then they can ask those 19 questions of every deal they look at. You can then call the people who clicked, because you know they are engaged right now. Even if someone never hires you, they walk away knowing what to ask. People don't know what they don't know.

Step 6. Make your credibility visible

An investor is always asking whether you are real. Give them proof they can see. I want my credibility to be easy to verify, so people can see your manufacturing plant, meet you in person and look at the assets you own. They can see your tech device and who your partners are. In our experience, we tend to do better with people who read our book, meet me in person or come to our investor summit. We want them to see that we are more than a website. Also put a one minute video of you as the founder on your site.

Step 7. Expect their screening questions

Many investors now use AI to screen deals before they take a call. At Family Office Club we built a tool that checks whether a deal is hype or has real meat on the bone. It also covers how unique it is, how much depends on execution, and gives seven questions to send the sponsor. If the sponsor won't answer, the investor may skip the Zoom call. If the answers are poor, they may decide not to invest. So prepare clear answers to the questions a smart investor would ask before they open your materials.

From my talks

From my books and event talks

Reading an investor also means respecting how little time they have. Most people don't have a one liner or a one pager, and when they do have a pitch deck it is usually two to three times as long as it should be. Nobody, including your own spouse, will read every word of a 60 page deck. I like to test this by putting the words Mickey Mouse on one page and asking my own team to review it carefully. See if they catch it. If they don't, an investor won't either.

What trips people up

• Pitching the whole meeting without asking a single question about what the investor wants.
• Spreading your message across many things, when you can't be an expert in 19 things.
• Chasing investors with your deal when you could attract them by talking about your industry.
• Asking for money before you have added any value to the investor first.
• Sending a long deck with no short, unique one line pitch that makes people lean forward.

Facts from this talk

• Jack in the mobile home park space raised $5 million, then raised $55 million after he started talking about the industry instead of pitching his deals.
• Chip had raised $7.5 billion of capital for clients when he opened by describing a product he had never seen before.
• I have spoken over 750 times at live events, including 300 of our own.

General education only. Not legal, tax or investment advice.

Talk to a securities attorney to explore options around offering communications, investor outreach rules and offering documents. Do not use AI to write your own legal agreements.

Questions about this guide

Related questions

• Why do investors say maybe instead of a clear no?A maybe is the easiest answer for a busy investor to give.
• How do I close a funding round?I close a funding round by focusing on investors who fit the opportunity and moving each interested prospect through clear, consistent follow-up.
• What documents do investors request during due diligence?Prepare a clear, organized package covering your operations, investments, compensation, team, and track record.
• How do I raise capital for my business?I raise capital by building a repeatable system for attracting the right investors, establishing credibility, and developing relationships before asking for money.

Use the ready to raise checklist alongside this guide.