“An entrepreneur must pitch a potential investor for what the company is worth as well as sell the dream on how much of a profit can be made” Daymond John, the American entrepreneur, investor, television personality had once said famously.
Nothing could be truer than this; in any business, pitching for investment is an ongoing saga for an entrepreneur. The better he/she is at pitching, the faster that business will see growth. In this article, let’s see the common mistakes entrepreneurs commit while looking for investment.
Reading out the Presentation; this is the most common mistake. Most people are not born orators and are often not comfortable with public speaking. The fallback option is often more attractive – snazzy PowerPoint presentations created by the marketing communications teams, their associates or even themselves at times. The problem is when entrepreneurs treat these PowerPoint’s as the Holy Grail. Over-reliance on these presentations makes for a very boring and tedious presentation, where the potential investor most often than not loses interest in the idea or project. A presentation is impactful only when the speaker makes that connect with the audience and that can be done ‘not just by reading out presentations.’
Unsolicited Mailing; sending out a pitch email or call to a potential investor. Never do that, that’s the worst mistake one can do. Just think of what happens to the emails we get, do we actually go through all of them. The answer is a clear No. We most often don’t and delete them unread. Now, imagine someone sending you emails, someone whom you don’t know, and on top of that, asking for money, the response naturally would be just ‘junking that email.’ So, always go through your networks, ask someone in the potential investor’s circle to introduce or recommend you.
Telling the investor that your idea/product has no competition; really, bad idea and the worst mistake to commit while pitching for investment. All products have competition and the same holds for business ideas. In fact, investors are most impressed, when you point out the competition [present and past] and tell them how your idea or product plans to beat the competition.
Tedious and detailed business plans; sending you long and detailed business plans are a waste of time for everyone, especially the investor. Details’ is good but revealing how much details’ of any idea/product is crucial for winning the investor’s support. Investors are pressed for time and as such, find it tough to negotiate detailed business plans. It’s best to keep it crisp and precise to help investors get a grasp of the plan in the first meeting.
Shift the focus to the investors; most entrepreneurs make the common mistake of selling themselves, their ideas, or products to the investors. Rather, change the focus and instead focus on what the investor gains out of your idea, product and why should he really invest in your venture. That will be a better selling pitch.
So, what are you waiting for? If you have an idea or a product that you think has potential, then go out there and create that pitch for investors – just keep in mind that you don’t commit these blunders!