Before realizing your startup business (also, your dream), you need to get funding. And to get funding, either you take it out of your pocket, or get investors to finance you.
More often than not, money coming from you is insufficient to cover all the expenses needed for your venture. You would need to sell your idea to venture capitalists and hope that you get their curiosity piqued enough to fund you.
Thus the need to make your pitch perfect! Har!
While there are a lot of presentation hacks that you can do, a lot of entrepreneurs still fail from gaining investors due to simple mistakes that could’ve been easily avoided. Here are some common startup pitch errors and what you can do to improve your presentation
1. Your team is there for a reason.
Most startup pitches focus on the business concept but fail to introduce each member of the team and demonstrate their credentials. Investors and venture capitalists would take a great team over a great idea any day.
Why? Because great teams can turn a shitty idea into something workable. And if you fail this startup, they know that you are capable of starting on another startup again.
You need this one in your team. Photo credit: lovine
Ideally, your team should be composed of a hipster, a hustler, and a hacker. Hipsters form the creative team, hackers in the technological arm, and hustlers in the business end.
From the onset of your presentation, after giving an overview of your concept, present your team. Show relevant skills and industry experience. Much better if you let all the members of your team to speak during the pitch.
2. Making investors sign NDAs
I’ve written in a previous post about startup entrepreneurs’ fear of having their ideas stolen. Their solution? Make potential investors sign a non-disclosure agreement before pitching. Bad move.
Most, if not all investors are turned-off by NDAs. It only gets in the way toward relating your business concept to investors.
Turned off.
And it doesn’t have a real value anyway. The rationale of the NDA is for protection, a paper shield to keep the other party from revealing what you are trying to do and how you are going to do it.
In most cases, you have more to gain for telling them what you are going to do (Feedback is one.) And you shouldn’t really reveal how you are going to do it anyway (aka the secret sauce). So it’s much better to do away with the NDA.
3. Hour-long presentations
Investors and venture capitalists receive hundred, if not thousands, of pitch emails and can only listen to several presentations. They don’t have time for your 50-slide presentation.
The key here is to make an elevator pitch, that is, limit your presentation in the span of an elevator ride (or probably a bit longer than that, but you get the point).
Screenshots from 500 Days of Summer aka How to Hook an Investor in One Elevator Ride
Give a quick overview of your team and what you do. If you get an investor interested, then you can always give more detailed information later. First, you need to get them hooked.
4. Excessively detailed slides
Your presentation should be something that draws audience in, not drive them out. Walls of text would only waste the time of your potential investors. Instead, use charts, graphs and other visuals for ease in understanding your information.
You don’t want to see this face. Ever. Photo credit: Thomas Leuthard
Aside from that, check the design of your slides. Again, you need to keep your audience interested. How you present your business concept is more important than you think. Fonts, images, even the position of the text should be considered when creating your slides. Look for resources such as this one or this one.
5. Not doing a product demonstration
I’ve mentioned in my earlier video game Kickstarter post, concept art is good but screenshots and gameplay videos are needed. The same holds true with business in general. Having a working prototype is way better than an idea.
I can finally download a car! Photo credit: La Tarte au Citron
Why? Because a product demonstration is proof of concept and would solidify your capabilities as a team that can deliver. Create a scale model of your product or use 3D printing technology for mockups. Be proactive in giving your audience a clear idea of what you are talking about.
These mistakes may not be fatal enough to result to your pitch failure, but every detail contributes to your pitch success. Getting a balance of engagement, accessibility and aesthetics can go a long way to get that funding that you aim for.
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Are there any more startup pitch mistakes that you know of? Hit us in the comments!