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I Coach Start-up Founders for Investors’ Events. These are the 7 Most Common Mistakes I’ve Seen

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This is it.

You finally have the opportunity to pitch your startup to investors. It’s the break you’ve always wanted.

Now what?

If you’re the type who breaks into a cold sweat over public speaking or feel that your presentation skills still need a lot of work, you might be dreading your first pitch day. Don’t worry, you’re definitely not alone. A Chapman University survey found that glossophobia, or the fear of public speaking, was a major fear of 26.2 percent of respondents, surpassing even kidnapping (25.1 percent), The Devil (23.1 percent), and murder by someone you know (21 percent).

In other words, pitches can be terrifying. When you’re presenting your ideas or product to an audience that’s seen their fair share of proposals, it can be difficult to make yourself memorable. And when faced with the reality that a good pitch can be the difference between getting and not getting the investment, it’s easy to see why nerves get the best of many people.

As a public speaking coach who has worked with clients from over 20 nationalities in the past 11 years, the entrepreneurs and founders I’ve seen who have a knack for pitching their ideas effectively share a few things in common.

And if you have to really ask, public pitching (speaking) can be learnt.

For starters, they’re confident—but not cocky. They’re approachable, but don’t come off as desperate. They’re also passionate, but can restrain themselves when necessary.

But more than that, they know how to strike the balance between making the pitch both about themselves and their audience.

As simple as that sounds, many entrepreneurs tend to make a number of basic mistakes when pitching to investors. Let’s go over a few of these below.

1. Forgetting the Human Factor, or the ‘Why’ of their Start-up

Businesses are built on solving people’s problems.

Unfortunately, I’ve seen far too many entrepreneurs forget this human element of business, and focus too much on product features, financials, and projections. The most rapid way to building a human connection with the investors across your table is to share why you are so compelled to build this venture on hand.

There’s a time and place for the numbers and business case, of course. But during the pitching stage, investors chiefly want “buy you first” before they “buy the business” and commit to working with your company in the long run.

How to avoid this mistake

If your company was founded because of a problem with no available solution, use this as an opportunity to open your pitch with an authentic story. When done right, a powerful story not only makes you appear genuine, it also sets the tone for your entire pitch and provides a context for any numbers and projections you touch on later in the presentation.[1] [2]

Take the story behind Spanx, for example, which revolves around founder Sara Blakely’s frustration when wearing white pants. It’s a story that buyers listened to because it’s relatable yet also highlights an unmet need in the market

Stories about the “pains” you’ve experienced first-hand always offer the smoothest segue into your pitch because it’s uniquely-you. Otherwise, focus on telling stories about people whom you are trying to help resolve their problems. And then after that, you can showcase how big the market opportunity can be by zooming out on how many others are likewise, facing the similar challenge.

2. Forcing Information onto Investors without Getting their Attention First

Another common pitching mistake startup founders tend to make is forcing their value proposition onto investors, without first giving them a reason to care about it. This is another reason why stories are so important—they’re a great way to overcome scepticism and connect with the audience on a personal level.[3] [4]

According to one survey of Angel Investors, only half of respondents were primarily concerned with potential for investment returns when evaluating startups. The rest were motivated by the impact of a founder’s solution and the founder’s thought process. Your story is how you can convey this information.

That is not to say profits and ROI figures are not important. Even more important is to do due diligence and cater your pitch to what your investor is known to care most about.

How to avoid this mistake

Context is everything. Instead of rattling off a list of reasons why investors should be interested in your business, work on drawing them in first. Pique their interest with anecdotes about the genesis of your idea and the journey towards turning it into an actual product. If it’s a remote or entirely radical idea or proposition, consider telling the story of a past success (or even failure) case study of another start-up that has similar running principles to build the context.

3. Using Too Much Industry Jargon and Buzzwords

Using industry jargon like cost per impression, loan-to-value, and top-of-funnel (BOFU) in a pitch isn’t necessarily a bad thing.[5] [6]

But you’re not doing yourself any favours if you are just throwing these jargons out without knowing if they are industry specialists to start with and wanting to impress. If anything, you might end up frustrating and boring them.

Buzzwords are just as bad, by the way, and will probably make you look like an amateur. Dropping terms like “the biggest disruption in Industry X,” “gamify,” and “big data,” without having a good reason (and justification) for doing so may do more harm than good.

How to avoid this mistake

Remember, the pitch is probably the first opportunity for investors to learn about your business. Obviously, you want to make this process as easy to understand as possible while conveying the crucial bits of information they need to know. Using too much industry jargon only gets in the way of this happening.

Your job is to speak plainly so the audience can listen to your pitch instead of having to Google terms every now and then. Instead of focusing on the technical details of your products, focus on what it can do, what it helps users accomplish, and why it’s differentiated compared to other comparable products or services.

4. Letting PowerPoint Define & Dictate Your Pitch

Some entrepreneurs make the mistake of using their PowerPoint presentations as a crutch when pitching to investors. Even worse, some are just reading off the slides, defeating the purpose of the pitch in the first place.

A PowerPoint is merely a visual aid—it should never define your pitch. Relying too much on it makes your presentation sound canned, insincere, and boring.

How to avoid this mistake

Investors want to hear from a startup founder’s real thoughts and ideas instead of being fed a script.

American venture capitalist, Guy Kawasaki, created the 10-20-30 Rule:

“10 slides are the optimal number to use for a presentation. 20 minutes is the longest amount of time you should speak. 30 point font is the smallest font size you should use on your slides.” 

While I’m not a fan of having too many rules to guide your pitch, this guide is a good one for starters. Examine your deck to see if you’ve made common mistakes like – too much distracting animations, colour contrast, deck flow and sequence, usage of stock images etc.

If you can’t succinctly explain what your company does and what your value proposition is without depending on a PowerPoint, try using less obvious materials like cue cards or a sheet of paper with one keyword for every agenda point.

5. Making Unrealistic Claims and Projections

I’ve seen some startup pitches where founders were obviously trying to inflate their projections to make themselves appear larger than they are, only to fall flat because they couldn’t validate their claims.

It’s a lesson that startups and ideas like Theranos and Fyre Festival, arguably the poster children of startup hyperbole, had to learn the hard way.

For example, in a leaked Theranos pitch deck, the company claimed the accuracy of its product was close to “gold standards,” without explaining what those standards actually are. Likewise, Fyre Festival’s glitzy pitch deck belied the fact that its organizers had neither the experience nor resources to pull off the “next Coachella” in the Bahamas.

Remember the investors sitting across you probably have sat in for upwards of 500 pitches in an average year and some can sniff out BS from miles away.

How to avoid this mistake

Don’t present any numbers if you can’t account for or explain how you arrived at your projections or claims.

When in doubt, use benchmarks instead of gambling on assumptions. And make sure you qualify yourself if you actually do. If you’re not the numbers person in the company, make sure you have your accounting guy walk you through the projections in your pitch including the methodology, thought process, sources and limitations of data.

I’ve also seen some founders claim that they don’t have competitors in their space – that shouldn’t be a good thing unless you’re discovering business opportunities on Mars. Having competition indicates that there is current market opportunity so your next business case is to prove better efficiencies to serve the large-enough market. Instead, focus on showing your team and company’s strengths and why your company is different (and better).

6. Not Creating a Sense of Urgency

The best pitches put the ball in the investor’s court.

If investors aren’t keen on helping you with capital or, at the very least, learning more about your product after the pitch, it’s likely that you’re not providing them with compelling reasons to take action.

This is what we classify as a “nice pitch” but not an effective one. An effective pitch gives a holistic rational perspective of your business but more so, creates enough emotional tug to ensure “investability” rings in the minds and hearts of your investors for them to act too.

How to avoid this mistake

One way to “raise the stakes” is to demonstrate growth and social proof. If you can prove that your business is about to scale or embark on a major marketing campaign, this can trigger a fear of missing out among investors, on some level.

Such “credibility proof” for your businesses may be, but not limited to, media features and mention, having “who’s who” on your board or advisory committee, working relationships with government entities or biggest brands (think Fortune 100), proprietary technology or high-level exclusive agreements or arrangements, accolades and professional attainments of your management team and yourself etc.

You will also want to be subtle when communicating that some investors have already taken interest in or have already invested in your company because it may come off as pompous and back-fire on you.

7. Providing Vague, Indirect and Obfuscating Responses during the Q&A

The Q&A portion of your pitch is an opportunity to clarify any points the investors and audience think may not have been explained sufficiently.

Likewise, it’s also an opportune moment for you to bring up any salient pointers you’ve missed out during your pitch, reiterate and reinforce key proposition and statements and most so, offering a more candid moment for call to actions.

Unfortunately, many presenters botch this chance by taking too much time to answer one question or going off on a tangent when asked to explain certain details.

How to avoid this mistake

Listen carefully to each question and limit your answer only to what is being asked. Likewise, don’t provide vague, adjective-laden statements as answers—focus on the facts. It will also be wise to prepare back-up slide content especially when walking through your investors regarding financial data and projections.

Don’t underestimate the kind of gravitas and impressions you can create when you come over-prepared and show that you know your stuff.

And if you get ensued with a persistent line of questions – don’t be offended and argue back like high school children. Your job is to educate the audience and convince them on what can be, not prove them wrong. You’ve nothing or little to gain in putting your investors down.

Practise and Do Your Homework

At the end of the day, the keys to a great pitch are consistent and conscious preparation and practice.

If you look at examples of impressive startup pitches and pitch decks online, they’re all backed by thorough research and attention to detail. Your prep work can make the difference between looking trustworthy and professional in the eyes of investors or looking like a rookie running a fly-by-night venture.

Of course, working with a trained coach helps so he can maneuver you through and away from these common mistakes (and more) so you can focus on acing your content and delivery.

And if you can avoid the basic mistakes listed above, it’ll certainly be easier for them to decide if they want to write that cheque, or not.

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