Six Mistakes You Must Avoid While Pitching Your Startup Idea to Investors

Startups HQ

Most startups will find themselves in scenarios where they have to pitch their business ideas to investors in a bid to raise financing for their budding enterprise. Unfortunately, most entrepreneurs are terrible at making presentations, hence they fail in securing the necessary funding for their business. A lot of care and attention needs to be put into making your presentation. You have to show confidence but not too much that you would be perceived as smug, you have to appear passionate but not too excited.

Most investors have been in the game possibly longer than you have lived so they know how to spot someone with a lot of potentials and also how to identify a bluff. Below are six mistakes that you must avoid making while pitching your startup idea to probable investors;

  1. Showing up unprepared:

You will be amazed by the number of startup founders who show up to meetings with investors unprepared. Investors and successful entrepreneurs typically have a lot of things on their plate or even if they are retired and have lots of time on their hands, they are usually irritated by unpreparedness. It is important that you show up to a meeting prepared, at the very least come with a pitch deck, which reveals that you have actually put some research into your idea.

  1. Pitching to investors who are not interested in your niche:

This is more like throwing your fishing net in a swimming pool, hoping to catch a tilapia. It just won’t happen. Most investors tend to have sweet spots; niches that appeal more to them. This could be biotech, clean energy, mobile apps, internet or digital media, etc. Do your assignment. Before you make your pitch ensure you are speaking to an investor who is interested in your particular niche.

  1. Not showing how big the potential of the idea is:

Over the course of their business years, most investors have built multibillion-dollar businesses. So it stands to reason that they won’t be interested in small ventures or businesses that don’t have the potential to really become big. Not telling investors how big the business can become can be a big mistake.

  1. Not having a proper understanding of the math involved:

In the end, it is always about the numbers. Numbers are the ultimate proof of anything that you do, and if you don’t show a good mastery of the numbers then you are not going anywhere. It is one thing to have a good business idea and paint a perfect picture to investors, but you must be able to tell them where the money is. You must be able to tell them how much you need them to invest and how much they are going to get out of their investment.

  1. Not studying your investor:

Believe it or not, investors will know if you have taken out time to study and know who they really are. Of course, no one expects you to know everything, but showing some general knowledge about the investor reveals that you are serious about the deal and you are ready to go to great length to see it happen. It shows determination and attention to details. These are some of the qualities that investors look out for in a startup.

  1. Saying you don’t have competition:

Telling an investor that you don’t have competition is revealing how naive or unrealistic you are. Regardless of what you are offering you sure have a competition, this could be direct or indirect or someone offering a substitute service. Your analysis of the competition will go a long way in explaining to your investor your knowledge of the market.

Leave a Reply

Your email address will not be published.