Did you know that in a survey of nearly 500 founders, a staggering 47% of them failed due to a lack of financing (based on the US, I’m sure the EU is not in any better shape). This is nearly double the percentage that failed for the same reason in 2021.
There is mixed feeling when you open up this topic, we can finger point at investors or we can reflect on how our pitches failed and learn.
Thanks to my AI tool (not GPT4), I have been able to scan the web in real-time, across many articles, and bring together the most common mistakes made when pitching to investors.
When you’re pitching to investors and venture capitalists, it’s easy to fall into the trap of thinking that you need to be an expert in everything. But here’s the truth: YOU DON’T.
The good news is that it’s not about what you know—it’s about how you can use what you know to solve problems for your customers.
In order to get investors’ attention, make sure you’re using these techniques when presenting your business plan:
1. Introduce yourself as a storyteller, not a presenter.
Start by talking about who you are and why this matters to both of you—that means starting with a personal story or experience that relates directly to your business plan. This helps them identify with you and feel like they already know who they’re listening to, which makes it easier for them to listen closely to what else you have to say!
2. Don’t just talk about your company;
Talk about the problem it solves and how many people are affected by it. Yes, we all know that there are tons of people out there who need our product or service—but investors want details on exactly how many people there are (and where they’re located), how much money they spend on products like yours (and why), and what kind of impact you’ll have on their lives.
3. Don’t forget about yourself!
Investors want to know who’s behind the company and why you’re qualified to run it. Remember that they’re looking for people who are passionate about what they do, who have experience in the field (even if it’s not directly related), and who have been successful in the past. Investors want to know that you’re the right person to lead their investment and they want to see the evidence of your accomplishments.
4. Have a plan for what to do with the money you raise.
It may sound like common sense, but it’s important to be able to explain how you’ll spend the investor’s money and what kind of return they can expect on their investment. Investors want to know that they’ll get their money back plus some profit, so make sure your business plan is well thought out and easily understood by someone unfamiliar with your industry. Have in mind the key areas of expenditure like into the product/tech, and especially the talent you’ll need to execute your plan, where and how you’ll find them and what you need to do to attract and pay them. No talent = no growth
5. Have a good idea of what you’re worth and be willing to negotiate.
Investors want to know that you know what your business is worth, just as they do. If they think that you’ll accept any offer without considering the value of the investment, they may decide not to invest in your company at all. Investors want to see that you’re willing to negotiate, but they don’t want to have a bidding war with other investors.
When an investor offers you $1 million and another offers $2 million, consider the differences in each offer and decide how much of your company’s value each investor is willing to pay. If you’re considering an investment from a family member, friends or colleagues, you may have to be more flexible on your valuation. It’s important to keep in mind that it’s not just about money; it’s about building relationships.
If you are looking for support on your next round of funding reach out to me for our free e-book “A guide to access Venture Capital” or for our upcoming pitch deck templates at anthony.heaphy@hyperionsearch.com.
