When new players step in to the ever-changing market, it is never an easy task to pitch new ideas to investors and get them to fund your brand on the double. Of course, you need the capital to push your ideas and concepts ahead, but there are preferred ways to go about this.
The products and services that you are planning to unveil could very well define a step forward in human prosperity. But, without careful planning and strategizing, it could end up blowing up in your face.
Like a professional presentation, entrepreneurs have to be absolutely formal when pitching their ideas to investors. Here are some of the more common debacles that put startups must be cautious of:
1. Anonymously sending your business plans
As if the internet isn’t already full of potential entrepreneurs trying so desperately hard to have investors take notice of them. Sending all of your business proposals just like that won’t actually guarantee you an instant deal, as there are plenty more just like you.
It’s like finding a needle in a haystack… long and frustrating. Instead, if it were a referral from someone in their network (like another venture capitalist or an entrepreneur from their portfolio companies), then things may start to turn up.
2. Not explaining the why the demand for your market is big
Obviously, there is no well-minded investor who could refuse a business that will turn a lot of heads. But you need to give specific details and explain how and why the market that you are aiming for will become even largeras time goes by.
The market needs to be a really approachable one for it to be something huge later on.
3. Preparing a 100-page business plan
You’re not here to present a 500-word research paper (or get your coursework done from a professional for that matter), but to sell yourself in the quickest and reasonable way possible. Investors don’t necessarily have all the time in the world to be sorting and sifting material, as there are plenty of other competitors who wish to be heard as well.
At max, you can settle for a two or three page executive summary. Or even better, a PowerPoint presentation.
4. Having only the CEO speak instead of the entire team
The investors wish to have your ideas put in motion, but only if the business is backed by a strong and dedicated team. Having only the CEO to speak out on their behalf is unrealistic and damages the chances of raising capital.
Do not speak out on your team member’s behalf or present them in waysthat would later on prove them otherwise.
5. Failing to identify their target audience
Knowing your target audience is most fundamental step to running a business. If you don’t have people interested in buying all the stuff that you are selling, there might as well be no business.
This is one of the biggest faults that end up costing startups a lot in the end. With all the time they had to prepare for the presentation to bring their ideas on the table, they somehow forget the most crucial aspect of their business.
6. Saying there is no competition
There is so much to lose when one is overconfident in their abilities. One of them includes being oblivious to their rivals or other competitors in the field. No matter where you go, there are several various competitors at each turn.
It matters not where you are located or situated, there are bound to be other companies that have the same ambitions as you.
7. Not having data to back you up
While it is true that investors have no time to look over large piles of content, it is really unwise to attend a pitch meeting without a framework of your plans. There are several metrics that you need to include, such as: lifetime value, churn, and customer acquisition cost.
Learn all of the above basics by heart and also craft your PowerPoint presentation accordingly.
8. Not following up
It doesn’t matters whether you did well or not, what matters is that you receive feedback from your meeting so that you know where you stand. Don’t let the fear of failure get you down and even if you didn’t make it, there is always a next time.
This article first appeared on College Startup