Pinterest CEO made a mistake pitching investors in the early days

Ben Silbermann founded
Pinterest in early 2010.
Hollis
Johnson/Business Insider

• Image sharing site Pinterest was founded right after the
  financial crisis, which made
  it difficult to fund. 
• When pitching to investors, Pinterest cofounder and CEO
  Ben Silbermann wouldn’t
  over-promise what the company could do. 
• After going through several pitch meetings with venture capitalists,
  Silbermann learned that he needed to do more to sell investors on the potential of the
  company. Today, Pinterest is valued at $12 billion.

Photo-sharing site Pinterest
was founded at “the worst time to raise money” for a company,
according to cofounder and CEO Ben Silbermann — right after the
financial crisis.

To fund the startup, Silbermann approached several investors who
turned him away because of the economic climate. Pinterest now
reaches 250 million people and
the New York Times reported that it will reach about $700
million in annual ad revenue this year and is valued at $12.3
billion.

“So I would say, ‘Hey, you know, we don’t have any money. We
don’t have any experience doing this. But we think this is a good
idea. We’re going to build this piece of software.’ And I
couldn’t understand why they weren’t funding us, but it was
probably the worst sales pitch they’d ever heard,” Silbermann
said on an episode of Business Insider’s podcast “This Is Success.”

After a while, Silbermann said he became “pretty desperate” for
funding and found a New York University
business-plan competition. Silbermann entered Pinterest even
though he was not an NYU student and won second place — he was
awarded a meeting with a venture capitalist who agreed to put up
half of Pinterest’s first round of funding.

“I don’t know; maybe because he took pity on us,” Silbermann
said.

He continued: “And so when he said that, we then called up all
the other people that we’d ever spoken to. This was random people
out of college, alumni directories, people that we’d read about
in the newspaper that were wealthy. And that’s how we put
together our first little bundle of money.”

Read more: 
The CEO of multibillion-dollar
Pinterest knew he was onto something when he started getting
personal emails from panicked users

Even though it’s cheesy, Silbermann said, his experience trying
to fund Pinterest taught him that it pays to be persistent. The
then-startup didn’t have anything to lose, so Silbermann didn’t
feel bad asking people to invest in the brand.

“But the other thing I learned was that investors — they kind of
want to hear that you’re selling the future. You’re selling a
dream of what could be. And when I used to go in and pitch
investors, I was very careful not to over-promise what we could
do,” he said.

Silbermann said people don’t expect you to have all the answers
in a pitch meeting. Investors want to see confidence that you can
figure things out in the future. 

“It’s the same with the employees you hire,” he said. “They want
to know that you’re going to work through those twists and turns,
and try to figure out the solution even if you don’t know the
answer right then.”