I will not invest in your startup! Perhaps I have lost the count now of how many times I have heard this.
I have tried and tried and tried to impress my investors, but have no clue what went wrong when I was pitching my startup idea to the investors. This was my bosom buddy Steve’s constant bickering and frustration that he vented out when he met me.
And one fine day he took me along to his pitching session … where I became an eyewitness of the scene to what happens when a startup entrepreneur pitches his unique idea (which he/she thinks is unique) to the investors.
What I witnessed at the pitching session completely staggered me….I am so tempted to share this experience … narrating here …
Pitching your startup idea to the investor will always be your learning experience. Very few lucky ones are able to get their idea funded on one go and the rest reads these kind of blogs to avoid “Not-interested-in-your-startup” situation.
When Steve was pitching the idea, there was this thought back of my mind that maybe after trying and correcting the mistakes, and still learning, there are still millions of things that you as a startup owner have no clue why your investor doesn’t seem to be interested — it could be as simple as he/she is in bad mood, he/she had a fight with their partners back home and are pissed off, the car broke down in the middle of the day, their favorite sports team didn’t won, their kids are throwing tantrums, etc. etc. etc. (You can think of any XYZ reasons here … you are allowed to because it is truth — A MILLION DOLLAR TRUTH).
You will have no clue unless that investor is decent enough to tell you upfront of what went wrong. But, believe me none of the investors Steve met were that decent to tell upfront, but yeah few of them dropped some hints……hahahahahaha I know you might be thinking what I am doing here busy bickering and bitching about them, naah!!!
Th reason behind to share this live experience is to learn to avoid these mistakes when pitching their ideas to the investors. So that hopefully you will not listen to this line, “I will not invest in your startup”.
I’ll start with …
Pitching your startup idea; not clear about the segment your investor might be interested in
Now that you are all set to pitch your startup idea, it is important to know your investors. My friend (Steve) didn’t. He overlooked investor’s portfolio and the segment they work and offers funding, and started explaining his startup idea. Well, he turned out to be a laughing stock to them.
Just like doctors have specialized area to practice, so do the investors. It made sense to me that doing homework will definitely help and avoids fiascos.
You smell all desperate (which Steve was)
Definitely needing money to fund your startup makes you desperate, but you don’t have to show it. Appealing investors is tough and this could be your 99th attempt to make it work, whatever the situation is keeping that desperation vibe at bay. I learned that you can show how earnest you could be but being pushy will never work in your favor even if it is 500th time.
We are gonna biggy … but hey where’s the traction
Steve was showing big dreams to his investors. Showing the projection of your startup to become 5 million dollar company in 5 years which is nothing but unrealistic. Your investors want to invest in a company which is significantly growing and went on to become and exciting business. I got to learn that avoid assumptions in your projections especially when you are zero in revenues today.
Asking investor to sign NDA
Steve sounded insecure hence he wanted his investors signs NDA. Well, not just he, but many startup owners might be doing the same. What I came to accepting the fact, that does it make sense if you have something highly confidential and you fear sharing it you’re your investors? It is the most insipid thing you would be doing if you are asking your investors to sign NDA. It’s not some CIA data that you should fear losing, let you guard down for a while and let your investor see trust in your eyes.
Big team … but only CEO speak
It showcased a good impression when you walk in with your team when you are pitching your idea to the investors which my friend did. I liked that part that he is considering to introduce his team to the fellow investors. But what he did was utterly bizarre…. He came with a big team for the talking but he was not giving other members an opportunity to explain the other segments of the business. The investors felt that it was just “Him” he is interested into talking.
PowerPoint is an addiction … and Steve has a got a big ONE
This not only bored investors, it bored me as well…Reading a slide deck line by line bores any investors. What I feel is you are the show, standing on the stage communicating with your audience, passionately sharing your ideas so why this PowerPoint presentation? You can talk and explain, obviously you will need some contemporary tech things to show but keep it to minimum.
Cockiness is really rude
Investors like to see your confidence and how passionate you are about your startup, but avoid chest beating. This pitching session where I was just a spectator I learnt well …If you are saying that your startup doesn’t have any competition … dude that reek nothing but arrogance. Been there done that…showing confidence is always good but over confidence is termed “Haughtiness”.
Losing confidence over difficult questions
No matter how smart your pitch is, there’s always a loophole where your investors are likely to ask you questions. These questions might be testing you about how solid your business plan is. It is important to justify your investors query when he/she is investing a huge sum in your startup. Being well-prepared will show how passionate you are towards your startup and how well you know your business area.
Do not take criticism personally
Taking criticism personally will not only lose your confidence and that is why Steve was falling apart. Don’t take tough questions, and feedback, or personal attacks personally they are just part of business and believe me you will get to face a lot of this shit ahead…rather take it optimistically, with an understanding that it will help you ahead in your life and business.
Lastly, putting down your passion
You will need more than just a startup idea to convince your investors — Passion. I very well understood this and have no hassles in conveying the same.
You will need a well-thought startup plan, along with great products and services and most importantly don’t fear to show your passion. It is the only thing you have got to carry through your entrepreneurial journey and let your investors know it.
Tell you what, Since I am also in a learning phase of my startup, with lots of hiccups and learning especially with this pitching session that I attended with Steve, I have concluded that a winning pitch takes time to master and it is witnessed that highly successful entrepreneur’s business plan commit blunders.
It is okay to mistakes which I have no shame in accepting, but avoiding above mentioned goof-ups will have fewer struggles in landing you with funding opportunities. Stay Positive!! Good Luck!!!
As always, let me know your thoughts on the topic. I’d love to hear your ideas and views in the comments below.