The Entrepreneur Insider network is an online community where the most thoughtful and influential people in America’s startup scene contribute answers to timely questions about entrepreneurship and careers. Today’s answer to the question “What’s the best way to pitch a startup idea to investors?” is written by Karl Martin, founder and CTO of Nymi.

As an entrepreneur, you’ll be receiving a lot of advice. One piece you’ll hear often: “Don’t run out of money.” Until your business is self-sustaining, you may find yourself in need of investor funds to pay the bills and keep the momentum going. Raising money from investors is often considered to be a basic rite of passage, but once you dive into the market, you might find yourself drowning in a mysterious world with unclear expectations. To you, your baby is a potential unicorn, but what makes a startup attractive to outside investors? It’s a complex question, but I’ll focus on some key areas that are often critical to gaining the interest of early-stage investors.

It’s first most important to understand that investors typically follow either a “theme” or a “thesis.” Theme-driven investing is motivated by a particular industry theme, such as mobile or Internet of Things. Thesis-driven investing is motivated by a particular thesis on how the future of a general industry will play out over several years. Either way, if you’re to have a chance of being attractive to a firm, you have to fit within its theme or thesis. Do your research beforehand and don’t waste time knocking on doors that won’t be a good match for your business.

See also: Why You Should Never Take an Investor to Coffee

Once you have a list of investors you want to target, you’ll likely become obsessed with getting that first meeting with each of them. It’s no secret that the highest rate of success comes from warm network introductions. The best introductions come from other founders that the firm has invested in. But even better is if you already have a contact at the firm. How do you pull this off? Get to know people at the firms before you need to raise money. Use your network to get those warm introductions when you’re not raising money so that you can form relationships without the pressure of an imminent fundraising deadline. Not only does this give you time to see if there’s a fit, but it also gives investors the time to see you accomplish the milestones you claim you will. Investors will be much more willing to invest when they’ve seen your track record firsthand.

Once you have contacts willing to take at least one meeting, how do you present your business in a way that sticks out (given that they will see hundreds or thousands in a year)? Many founders make the mistake of building a story around a series of checkboxes they think the investor will want to see satisfied, such as market size, relevance to market trends, intellectual property, etc. This produces a bland, undifferentiated picture of your business that’s unlikely to get them excited.


Instead, pick one or two significant, attractive qualities that differentiate your business and represent the vision of where you’re going. Many experienced entrepreneurs have said that an investor will invest because of one number, whether it be traction, engagement, number of patents, or something completely unique to the business. Whatever it is, pick that characteristic early and test it to see if it creates the response you expect it will. Beyond this, it’s important to ensure that there isn’t a deal-breaking characteristic (i.e., market too small, unproven team, no viable go-to-market plan). One of the most common mistakes entrepreneurs make is not being aware of venture capital math, which requires an investment to offer the potential of a significant return (e.g., 10 times or more) to be worthwhile.

After dealing with many investors and raising multiple rounds of financing, I’ve come to understand that there are typically only one or two reasons why an investor will put money in your business, but many reasons why they might say no. Sometimes it can seem like threading a needle, and the only way to truly find out whether your story will resonate with investors is to test it. Like all aspects of entrepreneurship, you should experiment aggressively, fail fast, and iterate. Don’t try to perfect your pitch before speaking to any investors. Instead, build long-term relationships that allow you to learn and grow, and you’ll find that you can gain more than just investment dollars.