“I like your idea, but I don’t like you.”
That’s not what an entrepreneur wants to hear after presenting a business opportunity to a prospective investor.
Of course, when a prospective investor thinks that about, or says it directly to, an entrepreneur, it doesn’t necessarily mean he doesn’t like the entrepreneur as a person.
The investor means he doesn’t trust the entrepreneur to successfully earn a profitable return on the investor’s money.
Returning to the TV show Shark Tank (once again!), the first time I heard a shark say something like this to one of the presenting entrepreneurs, I almost fell out of my chair.
It’s jarring to hear such an “in your face” comment.
The Founder as Quarterback
So what is the investor getting at?
Notice how often an entrepreneur who conceives a new business idea then also becomes the “quarterback” responsible for driving the business forward.
This probably makes sense in the initial phases of the business because the entrepreneur is likely the only one invested in the business – in football terms, he’s the only player on the field.
But as the business starts to grow, and attract investor interest, it’s not necessarily the case that the current quarterback who successfully moved the business to the current position on the field is also the best choice of quarterbacks to advance the ball even further down the field, so to speak.
Savvy investors know this well, and I think that’s what the sharks want to express to the entrepreneur.
That’s why when you hear the sharks make a statement like, “I like your idea, but I don’t like you,” the statement is typically followed by an offer to buy outright 100% of the entrepreneur’s company.
That is a shark’s way of saying the only way they will invest is if they can acquire complete control of the company in order to change the quarterback.
Blinded By Love
Do you know how many entrepreneurs accept such an offer from the sharks?
An offer that, by the way, would always reward the entrepreneur with substantial financial gain.
For the episodes I watched when such an offer was made – exactly zero entrepreneurs accepted the offer.
Understandably, the entrepreneur is so emotionally invested in his business idea, as well as his own position in the business, he can’t picture the business going forward without him leading it.
Objective investors are not blinded by love of either the business idea itself, nor by the idea that the current quarterback of the business has to be the same player going forward.
Objective investors just want to win the game – as measured by results.
They are not emotionally invested in the current business strategy, nor in the current team tasked with executing that strategy.
And their objectivity, grounded by their real world successes and failures, affords investors a greater chance of developing a winning strategy for the business, from this point forward, than the entrepreneur can offer.
I present this example from Shark Tank because it is not uncommon to witness a similar dynamic at play in the pro-life Pregnancy Help Center world.
A well-meaning passionate pro-lifer, or group of pro-lifers, starts a new Pregnancy Help Center.
Over time, the PHC increases the number of clients it serves, and the number of babies it saves from abortion.
The PHC wants to expand its operations and serve even more clients.
Achieving that goal requires larger philanthropic gifts, so a detailed expansion plan is created, and a fund-raising strategy pursued.
But when presented with the expansion plan, unlike the sharks on Shark Tank, rarely does any current or prospective benefactor pose the question to the PHC’s board members, or executive team, of whether a new “quarterback” might be better equipped to successfully lead the PHC’s expansion.
Benefactors tend to lose their objectivity, becoming as emotionally invested in the founder and leader of the PHC, as in the mission of the PHC itself.
It doesn’t mean the founder isn’t the right person to oversee the expansion.
But if the question is never asked, and other quarterback options are not objectively considered, then how would anyone know if the founder was the right person or not?