How to Ethically Persuade Investors and Close More Deals
How to Ethically Persuade Investors and Close More Deals Using Proven Psychology
Founders raising capital and investors or acquirers who want to win meetings, offers and board seats through trust and ethical persuasion.
In their words
"It's having an ethical reputation. People want to put their guard down and be able to trust you're going to do what you say you're going to do, so you can do business together."
"If you act like everything's perfect, people are going to look for the chinks in the armor and they're going to wonder what you're hiding."
"You should not have a favorite influence principle. You should just see what is natural in that environment."
Summary
Influence is simply getting people to say yes, according to Richard C. Wilson. It works because busy founders and investors rely on mental shortcuts such as social proof. He has studied persuasion since 2004 and recently interviewed the psychologist who wrote the book Influence. The talk applies those ideas to pitch decks, one-liners, follow-up and investor meetings.
The advice centers on ethics and listening. The top factor named was an ethical reputation. Richard also covers meeting in person, admitting trade-offs, asking questions for most of a meeting, and becoming a scarce authority in one niche. He closes with the three trust curves, which are trust in you, in the deal, and in the industry.
On the record
- Richard C. Wilson has studied influence and persuasion since 2004.
- Richard cites studies of normal sales transactions in which meeting in person raised closing rates 16 times.
- Chip said that after raising $7 billion over 40 years, he still approaches 300 plus investors to find 10 or 15 who invest.
Sources
From Richard C. Wilson's Centimillionaire Strategies YouTube channel: How to Ethically Persuade Investors and Close More Deals Using Proven Psychology. Quotes come from the video captions, lightly edited for readability. Figures are the speakers' own estimates and experience.
General education only. Not legal, tax or investment advice.
Talk to a securities attorney to explore options around investor disclosure practices, offering documents and investor communications. Do not use AI to write your own legal agreements.
What stood out
- Ethical reputation comes first. Asked for the single most powerful factor after 45 years of research, the psychologist answered an ethical reputation. People lower their guard when they trust you will do what you say.
- Do not fake your influence. Use what is naturally present in the situation. Telling an investor you will back only one company in a niche when you plan 10 or 20 can backfire and hurt your reputation.
- Meet in person when possible. Richard cites studies of normal sales that found meeting in person raised closing rates 16 times. He expects the effect to be larger for investments of $250,000 or a million.
- Ask questions before you pitch. Richard suggests acting like a doctor who examines first. Spend most of the meeting, he says around 60%, asking questions. The right answer may be to keep in touch rather than invest.
- Admit the trade-offs up front. If everything sounds perfect, people look for what is hidden. Naming the risks and trade-offs early can build trust. Many sponsors talk to a securities attorney about how to handle disclosure.
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.
Questions about this video
What is influence, according to the talk?
Influence is getting people to say yes to what you request. It works because busy people rely on shortcuts such as social proof and trusted recommendations.
Why should you not rely on one favorite persuasion tactic?
The psychologist told Richard not to have a favorite principle. Otherwise everything looks like a nail and you swing one hammer, which makes you less effective.
What are the three trust curves?
They are trust in you, trust in the deal, and trust in the industry. Very high trust in one can outweigh low trust in another, but if all three are low the investor is unlikely to close.
Put this into practice with the investor meeting follow-up checklist. See all investor psychology and trust resources.
