6 Things that Could Make Investors Tell You No
You keep making pitch after pitch to venture capitalists but nobody is offering your investment dollars. You are confident and you believe in your business concept but you just aren’t sure why others aren’t as excited as you are.
The competition for venture capital dollars is stiff and the number of investor dollars that are available for startup is smaller each year than it was the year before. Aaron Levie, cofounder and CEO of Box, has raised more than $160 million in funding and he recommends that “You should have a fully refined, bulletproof story.”
So, what are you doing wrong? These are the most common mistakes most entrepreneurs make when pitching potential investors.
- Don’t Go Overboard with Power Point
If you have an hour presentation, you should have no more than 10-15 slides in a presentation. Furthermore, every slide should be graphically appealing and interesting. Nobody wants to see a slide that does nothing more than list data or text and please do not make a slide just to show that you can. If not done well, Power Point presentations can be boring and counterproductive.
- Don’t Throw Spaghetti at a Wall
Don’t contact every VC in the country and hope someone responds with a cash infusion into your company. This will waste a great deal of time and yield no results. Research venture capital firms and find those that are most likely to fund a company like yours. Once you have identified your target venture capital organizations, develop and targeted and compelling pitch presentation.
- Your Credibility Is Your Biggest Asset
In the startup phase, your credibility is the biggest asset you have. Don’t throw it away by exaggerating or sugar coating your sales figures, the size of your customer base or your experience. You must be completely honest or your pitch is dead on arrival.
- Keep Your Value Close to the Vest
Don’t open your presentation with the value of your company. This is a major turn-off to most investors. Sell them on your concept, your experience and your work ethic before you disclose the dollar value you have put on your company.
- Business is a Marathon, Not a Sprint
Many first-timers make the mistake of asking for investors to help with a short-term cash flow issue. Instead of looking at your business in terms of short-term goals, look for investors that will help you reach long-term customer based milestones. This will help you raise more money and it will show investors that you are planning for the long term.
- Don’t Leave Your Product At Home
If your product is something that is small enough to carry, bring it with you. This is especially true if your product is something that is edible or wearable. If you have a new line of energy bars, bring samples for your investors to taste. If you have invented self-warming socks, bring a pair to give to everyone on the panel.