December 4, 2014
I see over 150 companies pitch for funding every year. That’s about 3 per week. When you see that many pitches, you learn a lot, such as those things that help make a pitch a huge success and those that completely destroy the presentation and the presenter in one fell swoop. In life, there are certainly things outside of your control that can negatively effect the outcome of your investor presentation, such as the weather, the investor’s mood, what they ate for breakfast, phase of the moon, whatever. Much more commonly, the wounds that kill a startup’s pitch are self-inflicted. Here are five phrases that can ruin your pitch:
- “I don’t have time to read”: Bill Gates, Jeff Bezos, and Sir Richard Branson are reported to read for more than an hour everyday; are you busier than they are? I often ask entrepreneurs about the last book they read. I am specifically trying to understand their level of natural curiosity and their desire for personal growth; if I don’t see these traits in a founder, I’m out. I need to be know that you are trying to get every advantage you can, and reading (or listening to audio books) is an obvious way to do that, so make the time!
- “My cousin’s friend plays golf with so-and-so….”: When your business plan relies in any way on an obscure relationship, I’m out. When describing the players that will affect your plan, be specific about why it is in their direct best interest to help you. A letter of intent or deal memo goes a long way to solidify my faith in these relationships.
- “Trust me, I have been in this biz for years”: I don’t trust you…yet. That’s why you are pitching. Asking for trust before you have earned it is a red flag in any situation. Answering a question with a statement like this tells me that A: you don’t know the answer or B: you don’t want me to know the answer. All answers should be honest, direct and fact filled; anything less and I’m out.
- “We don’t have any competition!”: If this is true, then you don’t have any market either. Even if your product is revolutionary, it must be replacing a current way of doing things. For example, when the calculator was introduced, it had pencil and paper as its competition. I need to know you have a clear understanding of what old habit you must break to gain traction, and why you can break it, or I’m out.
- “My lawyer says you’ll have to sign an NDA”: As an angel investor, I see hundreds of pitches, and many are about very similar products or services. Requiring a Non-Disclosure Agreement for me to look under the hood of your startup tells me two things. 1. you don’t trust me as a professional investor or 2. you are afraid that anyone can replicate what you have created, in which case it won’t be very compelling investment opportunity anyhow, and so I’m out. When dealing with investors, do your homework to make sure they are reputable, and leave the legal docs for the deal closing!
Avoiding these five phrases will help you and your company to stand out as professional, dynamic and experienced, and help get you to the one phrase you are looking for from investors: “I’m in”.
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