8 Things NOT to do when pitching to an Investor
The vast majority of founders know that preparing their pitch deck is a challenge. However, from there, presenting a persuasive investor pitch can be even more challenging. Indeed, many industry insiders feel that delivering an effective pitch is an art form!
While there are countless guides, tips, and tricks to help you perfect an investor pitch presentation that is not the focus of this article. It is rather the opposite and will explain 8 things that founders should NOT do when pitching to investors.
Let’s get straight into it with….
Mistake #1: Not Understanding That Less Is More!
It is only natural that founders are eager to give as much information as they possibly can during an investor pitch presentation This is NOT the way to go.
What investors are after is a clear overview of your startup’s potential and that this is delivered in a short space of time. That means to grab and keep investor interest during your presentation your slides should be easily understandable with key points highlighted.
Too much information will only confuse your audience. If this happens they are very likely to “tune out”. When it comes to your pitch deck presentation, less is most definitely more.
Mistake #2: Not Delivering Your Pitch With Confidence
For many founders (particularly first-time founders) the pitch presentation process can be intimidating. But presenting your pitch with a lack of confidence is likely to cast doubts in the minds of investors as to the viability and strength of your business.
This means you need to be right on top of every aspect of your startup and the message you put over needs to be clear and delivered with confidence. This does not come naturally to many but with practice, it will become far easier.
As you are putting together your pitch presentation slides and perfecting the story you will tell there is no substitute for practice. Founders need to know their slides and story delivery inside out.
By holding these regular practice sessions you will gain confidence. It is this confidence that will help convince investors that your startup is worthy of further investment consideration.
The bottom line here is: If you are not able to convey confidence that your startup will succeed, why should investors?
Mistake #3: Not Using A Single Pitch Presenter
This relates to points #1 and #2 above. Because your pitch presentation time is limited it is far better that only one person presents the pitch. Startups with co-founders may be tempted to use the 50/50 presentation strategy which involves the founder and CTO (or another senior member) sharing the pitch.
This is understandable because individual team members will have different strengths. Indeed, some might be better equipped to answer questions relating to such things as the business model as opposed to the technology. However, the use of multiple presenters is very likely to waste precious presentation time.
It could also work against you by distracting the audience from the key points of your presentation and instead drawing attention to how the team is managed and how colleague interaction is.
While it is not always the case this could give some in your audience an impression that there are issues or conflicts in leadership. That can happen because the individual take and delivery of your startup message can differ.
Having just one confident pitch presentation presenter who is prepared to deliver a clear pitch is the way to go. This will enhance persuasion and portray the image that your startup is one cohesive unit.
Mistake #4: Not Articulating A Coherent Marketing Strategy
As a founder, it is clear that you have full belief in your startup. The straight fact here is that just because you are building a product or service that is great does not mean you will automatically attract user adoption or healthy sales.
Investors need to CLEARLY understand your marketing strategy and what product or service initiatives you will put in place. This should highlight such things as:
- What outlets do you intend to use?
- What cost-effective methods will you use to reach prospective customers?
- How will social media platforms be used (Twitter, Facebook, Pinterest, Linkedin, etc.?)
- Do you intend to carry out content marketing campaigns that will see sponsored posts on influential business sites (BusinessInsider.com, AllBusiness.com, Forbes.com, etc?)
- What will your approach to search engine marketing be and indicate how productive you see it being?
- What steps will be taken to achieve some rapid early sales or early adoption of your product or service?
With the above in mind and your consistent pitch practice, this is where you should involve the person who will be responsible for marketing and sales of your business. They should supply these answers (and more!) as well as give clear explanations of your marketing strategy. Gleaning and understanding this detail will help you weave it into your pitch presentation in a positive way.
Mistake #5: Not Understanding CAC, Long-Term Customer Value, And Risk
Founders presenting their investment pitch have to be aware that potential investors will be very interested in how well you understand CAC (Customer Acquisition Costs), the challenges surrounding the long-term value of the customer, and the risk involved with your venture.
Let’s break this down into 2 sections:
CAC & Long-term value of the customer:
CAC & Long-term customer value are key areas of concern for investors. Founders should expect questions on both. To help you understand the sort of questions that may well be raised here are 5 examples:
- What costs will be incurred to acquire a customer?
- What is likely to be the lifetime value of the customer?
- What channels will be used to acquire that customer or user?
- What marketing costs will be involved?
- What length of time does the typical sales cycle take? This will be classed as the time between initial customer contact and closing the sale.
The term ‘risk’ has many founders shying away from raising this matter. It should not. EVERY business has risks of one type or another. Investors are aware of this, and they expect it, but they will also be keen to understand what you see as being the risks to your business.
This will include you giving them an understanding of your thought process and the precautions you intend to take to mitigate such risk.
Clear answers to some straight-shooting questions will be required and founders should not shy away from the facts. To match the 5 questions above on CAC & Long-term customer value here are 5 that may well be raised relating to risk:
- What do you see as being the principal risks to your business?
- What legal risks do you have?
- What technology risks do you have?
- Are there any regulatory risks?
- Are there any product liability risks?
If you are unprepared for such questions (and more in the same vein), this will affect investors' perception of how well-thought-out your business plan is.
Problem #6: Not Having A Demo To Present
If a picture tells a thousand words, the same goes for showing either a prototype or a working demo of your product, app, or website at an investor pitch presentation meeting.
If no demonstration is included in your presentation you are missing a trick. This is because it will help to give investors a far better sense of exactly what your product or service is/does and how it looks. So, wherever possible you should consider the inclusion of either a live demo or a video demo link in your deck.
There is a caveat here, if you intend to give a demo then you MUST ensure it works as you intend it to. Showing an app that has bugs or giving an incomplete demonstration will not impress the audience. In fact, it will do exactly the opposite!
With that in mind, any sort of demo you intend to give must be tested (and continuously tested) to ensure it works as planned.
Problem #7: Not Facing Up To Investor Questions
We are all aware that there are questions, and then there are questions! Meaning, some questions are far more easily answered than others.
Make no mistake, some of the questions asked by investors will be tough but this does not mean you should shy away from them or give an unsatisfactory answer just because you want that question out of the way.
An example here is just how common it is for founders to go off on a tangent when attempting to answer a question rather than addressing it head-on.
When asked a question, the way to go is: Pause. Think about your response. Then answer.
The other thing to remember is that you should expect difficult questions not just at the end of your pitch presentation but also during it. If investors are asking questions this is a positive sign, it means they are engaged. Trying to sidestep a question by stating “I will get back to you on that” does NOT leave a good impression.
As a founder, you should expect question interruptions during your pitch presentation and be fully prepared to answer them as they are given. By doing so investors will see that you are capable of thinking on your feet. In the fast-moving investor and startup arena that is a very positive thing.
One Thing You SHOULD Do Before Investor Pitch Presentations!
As a startup founder, you will already be aware of just how precious time is during the setting up and building of your venture. You must make the most productive use of your time. This can be achieved by seeking expert guidance and assistance in all relevant areas.
One area where this is particularly the case comes with the preparation and presentation of your investor pitch deck. That means smart startup founders will seek help and advice from those in the know.
WOWS Global offers exactly that. We have long experience assisting founders in every aspect of their journey. Our secure, state-of-the-art digital ecosystem has been designed to give you everything required at your fingertips. We also have the capability to match startups with like-minded investors.
Just as importantly, we offer a personal touch. Our highly experienced team is ready to listen, advise, and guide you through the challenges faced when creating and delivering an effective investor pitch deck presentation. One that will increase your chances of securing those all-important follow-on investor meetings.
If you would like to find out more and understand exactly what WOWS Global can offer your startup please do not hesitate to reach out to us for a no-obligation discussion at: