MISTAKES ENTREPRENEURS MAKE WHEN PITCHING TO INVESTORS

It’s challenging to stand out in the startup world. However, it need not be impossible. Focus on learning how to stand out among the crowd. In order to secure funding, entrepreneurs must make an investor pitch. Many business owners of startups commit typical errors that may be avoided. For advice on how to raise investor interest and the chance of financing, continue reading. 

Here are some guidelines to get you moving in the right direction: 

1. Sending your executive summary or business plan unsolicited. 

To level the playing field for racial and gender equity, some investors are opening their processes to cold contact, while the majority still habitually ignore unsolicited letters. They receive hundreds or even thousands of these emails, and they lack time to sort through them all to identify the one gem. However, a recommendation from a member of their networks, such as a lawyer, an executive from one of their portfolio firms, or another venture capitalist, will get their attention.  

2. Before you pitch, do your homework. 

Investors have their own preferences, so it’s important to make sure you’re in line with their goals. For example, some investors are exclusively interested in digital media, mobile apps, biotech, and the internet. Other investors may have requirements about a company’s stage or location. Before making your presentation, do your research to make sure your firm is in line with the goals of the investors. The conversation will flow more easily if you demonstrate some familiarity with the investor’s past and the businesses it has backed. It also demonstrates that you did some preliminary research before the meeting. 

3. Pitch your ideal investor first. 

You will receive insightful feedback from each pitch, which you may use to improve your presentation and deck. Start off with “warm” or “friendly” investors so that you are in a strong position when you pitch a highly sought-after investor. You must be ready to respond to inquiries succinctly, and practice will make your answers and delivery more polished. 

4. Asking to have an NDA signed before sharing information. 

A pitch deck’s goal is to pique an investor’s interest in a firm rather than to give a thorough dive, which would typically happen during the diligence phase. At the bottom of your pitch deck, include a copyright notice with the words “Confidential and Private. All Rights Reserved” for your own legal protection. 

5. Not looking at other pitch decks and executive summaries. 

You can make your own pitch decks and executive summaries better by studying others’ work. For example, ask your attorney, other business owners, or close friends who are angel investors. There are a ton online as well. 

6. Having more than 15-20 slides on your deck and making it difficult to view. 

You will have no more than an hour to present your case. Therefore, packing your deck with too many slides will impede the presentation’s clarity and prevent you from seeing the slides near the conclusion of your deck. You can always give more specific information later if an investor is interested. 

8. Failing to highlight your team’s experience and credentials. 

Specifically, if the team includes a serial entrepreneur, many investors value the personnel behind an early-stage firm more than the concept or the final product. Investors will want to know if the staff has the necessary aptitude, zeal, expertise, and disposition to expand the company. 

9. Showing unrealistic projections and valuations. 

There won’t be much attention if you present forecasts for the company’s $5 million in sales in five years. Investors want to put their money into businesses with the potential for rapid growth and exciting expansion. In contrast, it will be viewed as unreasonable if you present predictions showing that you will reach $500 million in three years, particularly if you currently have no sales. Avoid using hard-to-justify assumptions in your estimates, such as how you’ll reach a 400% increase in revenue with just a 20% increase in operational and marketing expenditures. 

10. Not explaining the product or service well enough. 

You should be prepared to answer the following questions, so prepare to describe your product or service’s features and why it stands out from the competition:  

  • Why are customers interested in your products or services? 
  • What significant product milestones exist? 
  • What distinguishing qualities best describe your product or service? 
  • What have you discovered from prototypes of the product or service? 
  • What two or three standout features do you intend to add? 
  • How frequently do you see the product or service improved or updated? 

Not every one of these errors is deadly. You will discover what matters to advisers and investors as you become better at it and give more presentations to them. Be sure to incorporate these suggestions into your pitch deck and presentation.  

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