Here at WGP Global, we are all about getting results – each and every time we are instructed by our clients. Our reputation depends on our continued successes, and we’re often asked by entrepreneurs the best way to approach investor pitches.
Frankly, when heading into investor pitches and meetings, an entrepreneur should be fully on his or her game, and in the (usually) short space of time in which investors are a fully captive audience, the tone and words used have to be right on the money.
Any nervousness, pausing or breathlessness in the opening part of the pitch is bound to put an investor ill at ease. Frankly, if you’re at the stage whereby you need to pitch, then you should already be polished, know your pitch from back to front, and be prepared to expand on any or all of the points made as needed.
A confident, well thought out pitch and presentation that holds interest, as well as the ability to be able to demonstrate the depth of your research, which will always win plaudits. However, it’s vital that you understand what not to say too.
There are a handful of items that you should keep well away from and not even think about, for fear of tripping yourself up and alienating those who might well be willing to hand you over their hard-earned.
Let’s take a look at seven common mistakes below;
We Don’t Really Know Our Unique Selling Proposition Yet
If you don’t know what your USP is, why on earth should anyone in their right mind invest in you or your business?
It’s worth considering that even if you don’t have a USP, investors are still going to invest if you appear to be a bankable asset with a solid business idea.
For example, if you’re able to demonstrate what is better about your business when compared with competitors. That could be your product or even the way in which your operation works.
What you need to keep away from is saying that you’re ‘the best’ for example. Under scrutiny you’ll be asked why and if you can’t answer, that’s your pitch in tatters.
We Have No Weaknesses
Although admitting weakness may seem to be a disadvantage from an entrepreneur’s perspective when pitching, not doing so will do more harm than good.
The fact is everyone has weaknesses, and those that choose to admit them are far more likely to be given a sympathetic ear.
Investors are there to help your business – as well as making money of course – so it’s critical that you lay your cards on the table from the get go.
I Don’t Have an Exit Strategy Yet
It’s vital that any talk of exit strategies are kept well out of your pitch. If an investor or investors want to know the state of play in this regard, they’ll ask you.
Making it part of your strategy and a reason for investment is a huge no no. It will be seen as a lack of commitment on the part of the entrepreneur.
Before going into bat, remember that investors are generally in the business of investment to earn a quick, and significant, profit. They can’t possibly invest if they’re not aware of when they can exit the business.
If you genuinely don’t have an exit strategy mapped out, then the chances are that equity fundraising isn’t the right way to go.
We Really Need the Money
Don’t beg. Just don’t. There’s nothing more hopeless than an entrepreneur appearing desperate for investment.
What would that precise scenario say about you? Even if you don’t have much leeway left with your bank, approach the opportunity to pitch confidently, even aggressively.
Show investors why their money can help you and give them food for thought. Ensure that they understand why they would be making a decent investment.
Investors don’t want to hear your sob stories but want to be part of the success story.
You Need to Sign This NDA
Let’s start with the elephant in the room (full of investors). Potential investors can’t sign an NDA. Why? It would preclude them from funding another entrepreneur who may have a similar idea.
Further, why would an investor or investors sign up to an NDA? Wouldn’t that suggest that they’re not to be trusted? Hardly the basis for a good working relationship is it.
Your idea is highly unlikely to be original, and to that end, investors are simply looking for the best entry point for their investment between you or your competitors.
The strength of your pitch is therefore the single most important element to you being able to ‘shake hands’ on any deal with potential backers.
Once you are at the due diligence stage with an investor or investors, only then would you consider broaching the subject of an NDA, and only then would they sign it.
This is Such a Sure Thing it Can’t Fail
It’s an accepted fact that nine out of every 10 startups fail. Part of your journey as an entrepreneur should also be about embracing failure.
Fail again, fail better. Get up, dust yourself down and turn things around.
Honesty is always the best policy so, during your pitch, make sure to steer clear of giving guarantees. There are none, and investors know that.
They’ll take a punt on a few startups knowing that if they cast the net well enough, one of their stable of companies will hit the jackpot, and that will make up for those that don’t.
What’s your best case scenario? What’s your worst? Let investors know both. They’ll thank you for it.
We Have No Competition
Wait, what? Of course you have competition. If you don’t know who you’re up against, then investors are likely to feel you’ve not researched the marketplace properly.
Poor research = laziness = no funding. Embrace the competition. After all, if your startup is as good as you believe it is, then you’ve nothing to worry about, right?
Don’t bad mouth others either. That’s never a good look, and who in their right mind would want to get behind an entrepreneur with that kind of attitude.
Take the baton and run with it. Ensure your investors know who the competition is and where you’re placed within that list.
Remember too that if you’re suggesting for one minute that you genuinely have no competition, why do you need an NDA to be signed?!
Don’t waste your time with companies that don’t have your best interests at heart. If you’re an entrepreneur needing advice, WGP Global are here to help, and we want to hear from you. Please contact us at email@example.com