When you don’t have the necessary funds to launch a startup, the pitch you deliver to potential investors can make the difference between a dream come true, and one swept under the rug.
At the end of the day, the profitability of your business idea weighs the most in the eyes of an investor, but that’s not the only factor you should keep in mind. Affluent investors can receive dozens of great business opportunities every week, and in that case, it’s the quality of the presentation that balances the scales.
Although not all of these common mistakes are fatal, it’s always a good idea to be prepared. You only have one shot at a good impression, and you don’t want an otherwise brilliant startup idea to go to waste because you didn’t put a few extra hours into your pitch.
Making Unsolicited Pitches
Having a limited understanding of your business scope
Not bringing enough materials
Lackluster presentation skills
Avoiding the hard questions
Making the pitch without a demo
Forgetting to follow up
FAQ
Making Unsolicited Pitches
Perhaps every entrepreneur out there has fantasized about bumping into an investor in the elevator and convincing them in 60 seconds that their idea is the next big thing. Unfortunately, this is the kind of elevator pitch is one-in-a-million scenario that creates unrealistic expectations.
In reality, you should never deliver a pitch without the investor agreeing to a meeting in advance. Investors are busy people, and they won’t be impressed by your gesture.
Even if you send an unsolicited pitch via email, in 99% of cases, it will go straight to the spam folder, so, to be safe, schedule a meeting to make sure your pitch is actually heard and given the investor’s undivided attention. Also, always make sure you prepare a short and engaging pitch about yourself.
Jeenal Jain
Having a limited Understanding of your Business scope
The worst moment to realize the flaws in your business model is during a pitch meeting. No matter how great your idea sounds in theory, the moment when an investor realizes you don’t know your product or the market, they will lose interest.
Not doing your research comes across as unprofessional and lazy and raises red flags – especially if you don’t have prior experience. So, know your audience, know your product and your competitors because you will 100% be asked about these things and, it will help you deliver a perfect pitch.
Not bringing enough materials
Even if your pitch is short and sweet, the investor will still need documents to back up your claims, provide a roadmap of business development, and expand on aspects that couldn’t be addressed in the meeting. Even if the investor did not request anything specifically, you should still bring with you the following:
- Business plan
- Executive summary (a shortened version of the business plan)
- Revenue forecast, cash flow, and operational expenses
- Resumes for members of the upper management, detailing their experience in the field.
To be extra safe, you should have both digital and physical copies of these documents. Referring to them during the sales pitch shows that you’ve done your homework and that you’re committed to your idea.
Lackluster Presentation Skills
A great presentation can’t turn a bad business idea around, but it can prevent investors from losing interest and forgetting your file in a drawer. Unfortunately, not everyone was endowed with Steve Job’s charisma and presentation skills, which is why the more you rehearse at home, the better.
You never know how you react under pressure, so having a script to refer to can save you from all those umms and errs that weaken your language and make you sound like an intimated high school student. It also helps to keep your presentation short.
Don’t show up to the meeting with a 50-slide presentation filled with large blocks of text. Instead, keep the number of slides to a minimum, use appropriate Powerpoint music, and focus on strong, impactful visual elements. The PowerPoint presentation should include key figures and ideas, but you’re the one controlling the conversation. In general, 15 to 20 minutes is more than enough for the investor to understand your business idea, so structure your pitch around this interval.
Gorish Dua
Avoiding the Hard questions
Pitch meetings aren’t a one-way street. The investor won’t give you a yes or a no after you delivered a monologue. On the contrary, expect lots of questions and don’t panic if they insist. What makes your idea so special? Why should they pick you out of all people? Can you guarantee that customers want your product? It’s just a way for them to check that you know what you are talking about and clarify some of the things they should know before going into business with you. And, when the questions inevitably get tough and touch on vulnerable points (after all, no business is immune), don’t react negatively.
By working with you, investors are taking a risk, and it’s normal for them to address problematic topics. If you become too defensive, rude, or downright avoid the questions, you may come across as unprepared or difficult to work with. Instead, try to answer difficult questions as transparently as possible and avoid the scripted “I’ll get back to you on that later.”
Making the pitch without a demo
You can’t make a demo for every business idea under the sun but, if your business model allows it, then creating a demo, even a rough one, can make your pitch more persuasive – especially if it’s technology-focused.
First of all, a demo helps investors visualize concepts that may sound difficult in theory. And secondly, it shows that you already have a capable team and that you went the extra mile and that you’re serious about your product.
Many times, investors meet up with entrepreneurs who only have an idea but don’t believe in it enough to put it into practice, so a demo helps you stand out from the crowd.
Forgetting to follow up
No matter how the pitch meeting went, you should take the time to send an email to the investor, thanking them for their time. Avoid generic, template messages and personalize your follow-up in a way that’s relevant for your interaction. It’s a small gesture, but it goes a long way.
FAQ
How long is napkin elevator pitch?
A good elevator pitch should last no longer than a short elevator ride of 20 to 30 seconds.
What is a common mistake of pitching?
The most common mistake you should avoid while pitching is not overloading your audience with information.
How do you end a pitch?
A great way to end a pitch is to ask them to join you on a mission or journey.
Author: Shubham Kumar
Source : https://startuptalky.com/mistakes-avoid-pitching-startup-idea-to-potential-investors/
Date : 2021-09-07T05:30:00.000Z