Being an entrepreneur is always a delicate balancing act. Every step you take should be well-thought in advance because a wrong step can be a setback for your success. One of the main tasks an entrepreneur faces all through his business life is acquiring funds. Whether you’re just starting out or you’ve already established and trying to scale, an entrepreneur must ensure that he’s never dry on cash. Therefore, pitching potential investors are one of the most important tasks for an entrepreneur.
To ensure that your investor pitches are perfect, highlighted below are five common mistakes that entrepreneurs make when they pitch their ideas to investors. Do you recognize yourself below? Give it a read-through because it will be up to you to avoid such mistakes.
All Words With No Supporting Evidence
This is one thing that discourages an investor almost immediately. Being the proud owner of a business idea, you should think the best of your concept. But making wild assumptions without any specific data to back your claims up, isn’t the way to do it. If your startup has a sufficient history, always carry your numbers with you and, if possible, try to memorize them. On the other hand, if your startup idea is still in its infancy phase, ensure that you speak based on your figures/assumptions on what others are doing in your industry.
- Do Not Forget To Follow-up
There are two types of people in business; ones who make spontaneous decisions and others who take their time, thinking about every scenario, do their research before making their final decision. Therefore, you should prepare to deal with both types of people. If someone tells you, they’re in or out, good for you but if an investor hasn’t given you a clear signal of what they think, make sure that you follow up with them until you get a clear answer. Don’t think that the follow-up will make you look desperate. It will simply show them that you know what you want and you’re serious about it. If you get “NO” as an answer, do not hesitate to ask them what prompted their decision and their ask for suggestions, if any. Their remarks will help you ensure that you do not repeat the same mistakes with other investors.
- Stating That There Is No Competition
Denial does not bring you anywhere. According to investors, it is better to be as transparent as possible with them because they are the ones who put their hard-earned money and trust into your idea. Competition exists everywhere, and geography does not limit it. Even if you have a great idea or business, you are competing for funds that everyone else is competing for too. So, don’t boast that you don’t have competition because it could eventually work against you and make you look naive to the investor.
- Not Knowing Your Audience
All investors are different from each other and bring something unique onboard. So, ensure you do your research on the investor you’re pitching to, their previous investments before yours, and how they can help you grow in addition to providing you with just the funding. While an entrepreneur is expected to have detailed information about his product, knowing the investor you’re pitching to will give you an upper edge and will help you better in pitching your business to the investor’s interests and also increase your chance of funding. Make it a priority to go through the investor’s investment portfolio on the internet to have an idea of the kind of startup or businesses the investor likes putting his money in.
Prepare For The Unusual
Being prepared is vital. And so is being flexible, thinking on your feet and being able to pull out a Plan B if you need to. For example, being wholly dependent on the fabulous deck that you have specially made for the meeting could end up biting you at the back. On the one hand, some investors will focus solely on your impressive deck and may give you the needed investment then and there. While, on another hand, there are some entrepreneurs who like to strike up a conversation and get to know the entrepreneur in whom they’re funding. When you are in a pitch meeting, prepare for every scenario that might come up.