Pitching your idea to potential investors is a lot like a first date. You have to be confident without being too smug, approachable without being a pushover and passionate but not too excited. As with a date where all you’re after is a second one, the idea of a pitch to investors is to gather up enough intrigue to where you’ll be asked on a follow-up meeting. If it sounds complicated, that’s because it is.
Most investors have probably been in the game for longer than you’ve been alive, but that’s not to say you can’t impress them. You’re not expected to know everything from the very get-go. But, most investors do value certain traits of young entrepreneurs and know how to spot someone with a lot of potential.
With that said, here are five mistakes you should avoid making when pitching startup ideas to investors.
1. Showing up unprepared.
Most investors lose interest or cut a meeting short if they sense the entrepreneurs is unprepared. At the very least you should have a pitch deck which shows you’ve put actual research into the matter and you didn’t just arrive emptyhanded. Do your homework beforehand and it’ll most likely pay off when you start talking to investors. More to the point, you’ll know what it is you want to accomplish and not make a fool out of yourself in the process.
2. Study your investor.
It’s always a good idea to study up on the investor you’re meeting. Believe us, they’ll know straight away whether you’ve done research on them or not. Although you’re not expected to know everything, some general knowledge of the investor shows you’re serious about the deal and will go to great lengths to make it happen. Plus, it’s a nice way to boost their ego and remind them that they’re important.
3. It’s all about math.
You can talk the talk, but can you walk the walk? It’s one thing to have a good business plan and paint a perfect picture to your investors, but unless you can show you can make a decent profit, don’t expect to get very far. Founders have to know, at the very least, the amount they want to raise and the amount an investor usually puts in a company. If those two don’t add up, it’s hard to get off the ground with just an idea.
4. Don’t ask.
Investors like seeing young entrepreneurs take matters into their own hands sometimes and start making forward progress on their own. You don’t have to wait to raise millions of dollars just to execute ideas and plans. In fact, you stand better chances of getting an investor loan if your plan is already in motion. If you’re not sure how to calculate loans, using the business loan calculator is always a good idea.
5. Feedback is everything.
You have to be important to feedback and not let your ego get in the way. Remember that investors are more than just an ATM machine for your startup. They want to help you grow your business and see you succeed as much as you do because they benefit from it as well. To that extent, do listen to their feedback, especially if they have knowledge in the field.
Confidence is everything. If you’ve done your homework and know what you’re talking about, investors will immediately pick up on those traits and you’ll stand out in their eyes from the rest of the crowd.