Pitching for investment? Don’t make these five mistakes
You can feel the blood coursing through your veins.
Your heart pounds in your chest and sweat starts to seep from pores you didn’t even know you had.
Sitting waiting to be called into a startup investment pitch can feel more exhausting than your morning workout (everyone has a super documented morning routine these days right?). With the adrenaline rushing – and the pressure on – it can be all too easy to forget the fundamentals.
Here’s the sad truth.
It’s often not the companies with the best products or the most innovative services that get the investment.
Nor is it always the best teams or those with the most robust business plans.
Even the most scalable of businesses can fall at the investment hurdle.
Simply because in the pressure of the moment it’s far too easy to forget yourself and make one or more of the below common mistakes. It’s not all bad though, like an ever friendly guide, we’re to help.
So, take a deep breath and make sure you avoid these pitfalls when the phone in the reception area rings and the PA announces that you’re on.
1. Losing focus
VCs, angels (and even bank staff) are human: they can only keep about four things in their mind at any one time.
Forget anything that is not absolutely essential to your pitch – keep your focus on the big picture –because you need to make sure that those few things they hone in on are the most important stats or arguments for investing in you.
Unless you are probed for more detail never over complicate your pitch with too many byways. Stick to the highway, because this is your road to success.
Prioritise the four things that are ‘mission critical’ and make sure your pitch is built around these.
And never be afraid to repeat them!
2. Forgetting who you are pitching to
Let’s think back to firing off a CV in the days when you held down a 9 to 5 (rather than spent 7 to 11 trying to get this business off the ground).
You’d never fire off the same CV and covering letter for different roles would you? Of course not, you’d tailor it for the company and role it was being sent to.
Your pitch is no different.
Are you going to deliver exactly the same pitch, using exactly the same language, to each investor considering you?
You’d be surprised how many startups do.
You need to adapt your language according to how well each investor understands your industry. Avoid using complex industry-specific terminology, acronyms and abbreviations that they may not understand. Conversely, if an investor is an expert in your field, don’t over explain the basics and appear condescending.
The easiest way to lose an investor’s heart is to talk over their head.
TL;DR: Research your investor and tailor your presentation style and content to their interests and
3. Numbing by numbers
You know your business inside out and you’re super passionate about it. You want to share your research, market stats, forecasts, case studies and costings to show how much you know about everything. You’ve left no stone unturned and you are stacked up and ready to present stat upon stat…
Remember you need to focus and filter, not drown your investor in a sea of figures.
Nothing can numb more than too many numbers. Your investor doesn’t want to see how much you know – they want to see that you know what is important. Stats related to this – and nothing else – are all you need.
TL;DR: Move most of your supporting stats to a separate section of your presentation deck.
When an investor’s eyes light up and they ask for further insight on your figures you can pull your trick out your sleeve. With just a click all the supporting stats they need are there fully, prepared.
4. Losing the personality contest
Particularly for pre-seed investment – where there’s no company history to really consider – a large part of what investors actually invest in is you (and your team).
This is not to say that a pitch is a popularity contest, however you must engage with your audience rather than pitch at them. A great way to gain this initial rapport is to to tell your story. This really places you – and your resilience, passion and skills – at the centre of things.
Take the pitch slow. Allow gaps for investors to jump in – and be ready to respond.
5. The fudge fail
Transparency is preferable even if the view offered is not fantastic. Investors are astute business people with years of experience and are incredibly quick to spot a fudge. The slightest bit of stretching the truth sets off a BS detector which can be a very difficult situation to retrieve.
This is a long-term relationship you are looking to build. And long-term relationships are built 100% on trust.
Those humble sales figures for the last couple of months coupled with a realistic projection of what you can achieve in the next six may well win you that essential trust.
Slightly obscured sales figures followed by unachievable forecasts will almost certainly lose you that pitch.
They are not going to invest if they don’t trust what you say (or you), and that goes for your business and your competition. Be upfront and honest about the strengths and weaknesses in your market – and exactly where you slot into this.
TL;DR: Rather than try and obscure sticky areas be prepared to discuss them honestly – and offer a realistic assessment of what it will take to overcome them.
If you’re interested in pitching the G33K incubator team, we are currently inviting the next round of super-startups to pitch over the coming weeks. Fill in the application form on the following link: https://g33k.co.uk/incubator/ to be considered. Looking forward to hearing from you!