Avoid These Mistakes When Pitching to Investors

As Cohen noted, it’s a result of seeing so many pitches that investors can offer insights into what works and what doesn’t work in a pitch. Here are a few of the most common mistakes that Cohen along with other investors list:

1. The pitch lacks clarity

You should be able to give a clear description of what your company does – what needs it meets and how it does so. This should be short and succinct – think “elevator pitch.”

2. You don’t talk about your team

As Chris Dixon suggests, you want to pitch yourself not your ideas. In other words, it’s important to be able to describe what it is about you and your team that gives you the skills to accomplish your business’s goals. Highlight what you’ve done in your past in order to demonstrate your abilities.

3. The pitch focuses on the technology at the expense of addressing the problem it addresses or the solution it offers

You can have developed some amazing technology, but your pitch needs to do more than tout its brilliance. You need to link that technology to a problem and explain why it’s the right solution.

4. The pitch doesn’t address the market

Your business should solve a problem, yes, but you also need to establish that there’s a market for the solution you offer. Simply because you’ve built the technology doesn’t mean you’re automatically going to have generated customers. Who are your customers? How are you going to reach them and convince them to adopt your technology?

5. You ignore the competition

VC Santi Subotovsky points to this in his list of common pitch mistakes. He cautions entrepreneurs again “Ignoring the competition with statements such as ‘nobody is doing it.'” “When entrepreneurs say they don’t have any competitors,” he writes, “then VCs think they haven’t done enough due diligence or they have a completely revolutionary solution that is going to change the world. Most of the time, unfortunately, the first explanation is correct.”

6. The pitch offers invalid competitive advantages

Jason Cohen lists this as one of the most frequent mistakes he sees. He explains that the following are not competitive advantages:

  • Having feature x
  • Having the most features
  • Having staff with PhDs and MBAs
  • Having passion
  • Being better at SEO and social media
  • Being cheaper
  • Working harder
  • 7. Your delivery is bad

    Investor Greg Gretsch‘s list of common pitch mistakes, he admits, contains a lot of things he notices in terms of the style, not just the content, of the pitch. “But then, since the majority of the investment decision for me is based on the people, the style and delivery issues are very clear windows into the most important content of all – the entrepreneur.” Gretsch points to problems like excessive name-dropping, over-complicating, and defensiveness as potential red flags.

    As we wrote earlier this year, it’s important to do your homework before pitching to investors, so you understand their history and their portfolio. This homework might also help you identify some of the things they want – and don’t want – to see in a pitch.

    Welcome to the Lost Decade (for Entrepreneurs, IPO’s and VC’s) « Steve Blank

    Welcome to the Lost Decade (for Entrepreneurs, IPO’s and VC’s)

    If you take funding from a venture capital firm or angel investor and want to build a large, enduring company (rather than sell it to the highest bidder), this isn’t the decade to do it. The collapse of the IPO market and dysfunctional math in the venture capital community has stacked the odds against you.

    Here’s why.

    The Golden Age for Entrepreneurs and VC’s
    The two decades from 1979 when pension funds fueled the expansion of venture capital to 2000 when the dot-com bubble burst were the Golden Age for entrepreneurs and venture capital firms. VC’s were making investments every other financially prudent institution wouldn’t touch – and they were printing money.

    The system worked in predictable and profitable ways. VC’s invested their limited partners’ “risk capital” in a portfolio of startups in exchange for illiquid stock. Most of the startups they invested in either died by running out of money before they found a scalable business model or ended up in the “land of the living dead” by never growing (failing to Pivot.)

    Startup lifecycle in an IPO Market

    Another well thought out post by Steve Blank. One question, though, would this apply to local markets as well as more established markets within the US. It seems like the rules may not be consistent between these.

    Blog by Doug Richard on lifestyle businesses | Smarta

    Doug Richard: Why do people hate lifestyle businesses?

    Doug Richard: Why do people hate lifestyle businesses?14 July 2010 by Sophie

    Doug Richard is an entrepreneur and investor, former
    star of Dragons’ Den and founder of
    School for
    Startups
    .

    I have never understood the antipathy that otherwise rational
    people have for the so-called ‘lifestyle business’. Quite recently
    I heard someone in a position of responsibility in the small
    business community disparage lifestyle businesses. They weren’t
    real businesses, he said. They only enriched the owner, he said.
    What the f**k, I thought to myself?

    I’m in the same mindset here, especially I think for HK many small lifestyle businesses makes sense. We’ve got the right combination to be a service business hub, why not take advantage of it?