After guiding a few of our founders through their seed raises. Taking them from forming the pitch deck, to attending office hours, and receiving term sheets. We’ve heard the types of questions investors ask, and walked many through the funding etiquette to secure capital. Along the way we’ve seen a few fails and roadblocks as well.
These are 7 things we see so often that we thought it’d be best to create this guide of what not to do when raising capital.
- Don't’ ramble about what you do.
Create a 2 line pitch that grabs immediate attention. The first sentence says what you do, and the second says, why they should care. The “what” can be a simple 1 line of what your company does that helps others, the “why'' should be validation that backs your startup’s value. Number of customers, a current impressive event (like a raise or an accelerator), etc. This can help you get an investor's ears raised to hear more which is a good start.
Read more about how to form your 2 Line pitch here.
- Don’t use slide transitions.
Investors are busy people and spend 45 seconds per pitch deck on average. Slide transitions just slow things down and frustrate them while they’re going through your pitch deck.
- Don’t forget your audience.
Many founders get tunnel focused during presentations. They can get so focused on selling the idea that they default into selling the product instead as if the investor was a customer. Investors don’t want to buy your product, they want a clear presentation of the opportunity they can have if they invest in your business. It’s your job to show them how they can get serious returns on their investment. Remember your audience and stick to that.
- Don’t rush through slides
Have you ever been watching someone present and try to politely listen but still need to read the slides? Your eye’s might peer off to the slides every few seconds and miss something important they said, or the other way around. It’s difficult to both listen to the pitch and read the slides at the same time. This is why you should leave a small pause at the beginning & end of each slide in your presentation to give time to read. Keep the slides simple so they can scan quickly and then focus their full attention to you.
- Don’t use words that indicate a lack of confidence.
The investor has to believe in your company's ability to succeed along with your idea, so use words that indicate certainty in what you’re doing. Less “we think” and more “”we will”; for example, “we will change the x industry by doing this”.
- Don’t use vague or subjective words.
Vague words make people think you’re hiding something. Leaving out specific numbers where they could be included may leave an investor wondering why you didn’t say the actual number if it’s truly significant.
For example, instead of “our team has a significant amount of experience”, say “our team has 17 years of experience.
And lastly, don’t use subjective words. For example, when comparing your product to competitors, don’t say “they’re a bad option.” Instead, clearly describe the competing product and allow the listener to come to the conclusion on whether they are good or bad.
- Don’t just tell, Show your proof.
Trying to convince them that your app is easy to navigate?
Don’t talk about it -- show it using GIF’s, Screenshots, or even testimonials.
What about customer love and appreciation?
Get quotes of reviews from your actual customers and show them on screen rather than recounting them anecdotally.
Are you looking for help getting funding?
If so, by joining our startup accelerator program you have access to walkthrough’s detailing how to avoid these mistakes and others when raising capital. Find out more to apply here
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