One of the most crucial steps for aspiring entrepreneurs seeking financing is to pitch investors.It can be confusing and time-consuming, but the better prepared you are,the quicker you’ll seal a good deal.
You must know about the common mistakes to avoid when pitching to investors so thatyou can stand out from the crowd. Investors hear multiple pitches in a day. Some stay with them, while others are forgotten the second the meeting is over.
To ensure your pitch is memorable and convincing, you must avoid the mistakes discussed in this article.
Mistakes to Avoid When Pitching InvestorsBy avoiding the following mistakes, you can increase your chances of securing your desired financing
Things You Shouldn’t Do during Investor Outreach Planning
1. Sending Your Business Plan Unsolicited
Since investors receive hundreds and thousands of emails from entrepreneurs, most of them don’t have the time or energy to sift through them and read unsolicited pitches.
To maximise the chances of your pitch getting noticed by an investor, you should find a way to get referred by someone in their network. It could be a fellow venture capitalist, a lawyer, or an entrepreneur from a portfolio company.
Ask your board of directors or lawyer if they can introduce you to an investor or have recommendations on investor referrals.
2. Not Doing Proper Research on the Investor
An investor will consider your business pitch only if you’re in a stage, space, and location they’re interested in. This is why you must do your homeworkand ensure your company or business idea aligns with their objectives before going all out.
You can find most of the information on the investor’s website. If you’ve been introduced to them, you can inquire everything from the person who has made the referral.
Knowingthe essential details about the investor’s background and their investments will facilitate the conversation and show that the meeting is important to you.
3. Reaching Out to the Ideal Investor First
This is one of the biggest mistakes to avoid when pitching investors.You’ll receive valuable feedback and insights in every investor meeting. This means you have a chance to improve your deck and polish your presentation skills before you pitch your ideal investor.
You should start withless desirable investors to strengthen your position and prepare yourself to give on-point responses during the presentation.
4. Not Reviewing Other Pitch Decks
Reviewing other pitch decks and executive summaries allows you to enhance your own. Don’t hesitate to reach out to your lawyer, investor friends, and other entrepreneurs to ask for samples. You can also go through sample decks online to get an idea of how it’s done.
5. Presenting a Non-Disclosure Agreement (NDA) before Sharing Info
Asking to sign an NDA before the meeting is one of the biggest mistakes to avoid when pitching investors since most investors don’t do that. It’ll only create a hurdle for you to connect with investors.
A pitch deck is supposed to grab an investor’s attention and get them interested in your business. You should expect it to be shared on a larger platform. If you have something confidential, you cansave it for later.
That being said, you can put a copyright notice at the bottom of the document and mention, “Private and Confidential. All Rights Reserved”.
Things You Shouldn’t Do When Preparing Your Pitch Deck
6. Creating a Presentation with 20+ Slides
Typically, entrepreneurs get no more than an hourto pitch investors.Hence, your presentation should be crisp, concise, and straightforward. Going too much into the details is one of the most common mistakes to avoid when pitching investors. If an investor likes what they see and hear, you’ll have plenty of time to share additional details later.
Another reason to avoid overloading your pitch deck with information is that it’ll probably be viewed on a smartphone or tablet. A file of 5 MBs or smaller eliminates the risk of cellular download restrictions and email filters. Also, you shouldn’t send your pitch through Google Docs, Dropbox, or other file sharing platforms. Always attach a PDF file to the email.
7. Not Highlighting Competitive Landscape Analysis
Every business has competition, whether direct or indirect. You must include a competitive market analysis in your pitch deckto show that you properly understand the current landscape.
Investors would like to know how your products and services are better than what’s already being sold. Make sure you highlight your value proposition in the deck to increase your chances of securing financing.
8. Not Talking about Your Team’s Credentials and Experience
One thing that most investors focus on after your business idea is the team behind the project.They’ll want to know if your team is equipped with the necessary tools, skills, experience, temperament, and resources to run and grow the business.
You can expect them to ask the following questions during the meeting:
• The name of the founder and key members
• The relevant industry experience of the team
• The unique capability of the team to execute the business plan
• The need for team expansion
• The founder’s motivation
• The name of the board members and why they are a good fit
• The 12-month plan of scaling the business
Make sure you prepare accurate and effective responses to these questions.