Being an entrepreneur is like constantly walking on eggshells. Every step that you take has to be well-thought beforehand because one wrong step on the way can set back your venture’s success by a few months or even years.
One of the main tasks that an entrepreneur has to do throughout his entrepreneurial life is to keep securing funding for the startup. Whether you’re just starting up or you’re already a few years down the road, an entrepreneur needs to make sure that his/her startup is never out of cash to try out new things and better the existing ones. Hence, pitching to potential investors is one of the most important tasks for an entrepreneur.
In order to make sure that your investor pitches are perfect-to-a-T, we at IndianWeb2 have identified the 5 most common mistakes that entrepreneurs make while pitching their ideas to investors.
1) Not Knowing Your Audience
Every investor is different from another and brings something unique onboard. So, make sure that you do your homework on who you’re pitching to, their previous investments and how could they help you in growing in addition to providing you just the funding. While an entrepreneur is expected to know about his/her product, having the knowledge of the investor you’re pitching to will give you an extra edge and help you in better pitching your startup to the person’s interests and increase your chances of landing the funding. Make it a point to go through the investor’s investment portfolio on LinkedIn or AngelList to have an idea on the kind of startup’s the person likes to put his/her money in.
2) Be Prepared For Every Scenario and Don’t Be Too Dependent On The Deck
This happens to the brightest of minds out there. While being prepared is always better but being fully dependent on the fabulous deck that you have especially made for the meeting could end up biting you at the back. On one hand, there are some entrepreneurs that will listen to your impressive deck and give you the investment then and there; while, on the other hand, there are some entrepreneurs who like to strike a conversation and know the entrepreneur in whom they’re investing their money. Hence, when you walk into a pitch meeting, be prepared for every scenario that might come your way.
3) All Words but No Evidence
This is one thing that puts off an investor almost immediately. While being an inventor of a particular idea/product makes you want to think the best for them and their future, but making wild assumptions without any concrete data to back up your claims isn’t the way to do it. If you’re startup has a sufficient history, always carry your numbers with you and if possible, try to know them by heart. On the other hand, if your idea is still at its infancy stage, make sure that you base your numbers/assumptions on what others are doing in your sector.
4) Stating That There Is No Competition
Denial isn’t going to take you anywhere. And, as far as your investor is concerned, it is best to be as transparent as possible with them as they’re the ones putting their trust and hard-earned money in your idea. Competition exists everywhere and is not bound by geography. Even if you’re the most disruptive startup on Earth, you’re competing for money that is currently being directed somewhere else. So, never go around boosting that you have no competition as that might work against you and make you look naive in front of the investor.
5) Do Not Forget To Follow-up
There are two kinds of people in the business; ones who take spontaneous decisions and others who take their time, think through every scenario, do their research and then arrive at their final decision. So, you should be ready to deal with both kind of people. If someone tells you then and there if they’re in or out, good for you but if an investor hasn’t given you a clear signal of what he/she is thinking, make sure that you follow-up with them until you get a clear answer. Don’t think that the constant follow-up is going to make you look desperate. It will simply show them that you know what you want and you’re not afraid to go after it with all your strength. If the answer is no, don’t hesitate to ask them what went wrong and their suggestions, if any. Their suggestions/remarks will help you in making sure that you do not repeat the same mistakes with other investors.