Startup Entrepreneurs To Avoid These 10 Mistakes When Pitching To The Investors

February 04, 2016

Startup Entrepreneurs To Avoid These 10 Mistakes When Pitching To The Investors

Pitching to the investors your business idea is not easy.  Getting it right in the first go can make a lot of difference between success and failure and that is why most people feel so much pressure to get them right the first time. First impressions are vitally important, and coming across as boastful or even too zealous can kill even the best pitch before it really gets off the ground.

Finding the right balance of passion and confidence, while providing the right information in the right format can be difficult, but once you have crafted a formula for pitching your startup perfectly, you will have no trouble drawing in investors, clients, and partners.

But how do you find that balance? Here are 10 mistakes to avoid when creating a pitch for your startup:

1.Not pitching to the right investors

This is the most bizarre mistake that startup entrepreneurs do. They do not do the legwork and straight away head to approach the investor. It is important to know your investor’s portfolio and where does his interest lies in. Finding investor in your niche and pitching to the investors is crucial than wasting your time in not knowing where your real market lies.

2. Failing to get to the point

Lame presentations and poor talking is one of the things where startups are finding it difficult pitching to the investors. Investors like to get to the point. It’s not okay to ramble on and on and on by then you would have lost your prospect’s interest and your business startup idea is in trash.

3.Coming in with your big team to pitch in and it is only “YOU” are talking

Investors want to know that you have a good team. Only having the CEO/Founders speak at a pitch meeting is a mistake. How will the investor gauge whether the other team members are any good if they don’t hear them speak? And please don’t have the team members contradict themselves.

4. Lack of figures and story

When pitching to the investors, you may get them at the edge of their seats with a compelling story, but you also need to give some figures and data to let them know your ideas or your business has traction. You don’t have to provide a full table of numbers, but you can include a small graph and a few percentages to display how your business processes work and how your business performed in time increments.

Providing demos are also great alternatives to get them interested in your business. That way, you still sound business-like while effectively touching them with your narrative.

5. Asking to sign NDA before sharing the information

Most investors have a policy not to sign non-disclosure agreements. It is very awkward for any investor asking them to sign NDA, also it shows the “non-trusting” signs which makes the scene ugly. The investor may not like the same and would not prefer going with an entrepreneur who cannot trust.

6.Giving confused answers

Entrepreneurs should practice their pitch with friends and advisors before presenting to an investor. You need to be prepared to give crisp answers to questions. You have to anticipate the difficult questions you may get.Don’t evade the hard questions or tell your investors that you will get to it later in the presentation. The investors want to see if you can think on your feet. Expect to get interrupted during your presentation.

7.Presenting unrealistic valuable expectations for your company

If you are telling your investors to invest 100 million valuation when you just have started the business 3 weeks ago, or don’t have much traction yet, the conversation will likely end very quickly. Often, it’s best not to discuss valuation in a first meeting other than to say you expect to be reasonable on valuation.

8.Having long sloppy slides on your presentations

You will have an hour at most to make your pitch. So overloading your PowerPoint deck with too many slides will cut into the crispness of the presentation, and you won’t have time to get to the slides at the end of your deck. If an investor is interested, you can always provide more detailed information later.

9.Forgetting your team’s credentials and experience

Many investors consider the team behind a startup more important than the idea or the product. The investors will want to know that the team has the right set of skills, drive, experience, and temperament to grow the business.

10. Not explaining the products or services well enough

When pitching to the investors, the entrepreneur must clearly explain what the company’s product or service consists of and why it is unique, so expect to get the following questions:

  • Why do users care about your product or service?
  • What are the major product milestones?
  • What are the key differentiated features of your product or service?
  • What have you learned from early versions of the product or service?
  • What are the two or three key features you plan to add?
  • How often do you envision enhancing or updating the product or service?

You will be asked tough questions, but don’t argue with any of your investors. Remember: grace under pressure. Be professional, and politely address any suggestions or criticism when pitching to the investors no matter how badly it sounds to you.

Lastly, if it’s your first time or you are nervous in pitching to the investors, take a deep breath to calm your nerves. People will notice your worry, which will be hard for them to focus on what you’re saying. Make sure you practice ahead of time. It could be with your family, friends or colleagues, so that you’re ready for anything on your big day.

A winning pitch takes time to master and sometimes, even the best and highly successful entrepreneurs commit blunders when talking business with other people. It’s okay to make mistakes, but it’s golden to always learn from them. Equip yourself with an amazing deck, a well-outlined executive summary, and an endearing speech. Soon, you’ll have investors providing the funding needed so you can finally take your business to the next level.

February 04, 2016

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