Believing in your own business idea is easy. Getting others to believe in it enough to fund it? Not so much.
When pitching your idea to investors, you need to be clear, concise, and on top of your numbers. You also need to avoid these five mistakes, Entrepreneur says.
Not Researching the investors
Not all investors are going to be a good match for your concept, whether it’s because they do not typically invest in your type of business, or they wait to invest until businesses have reached a stage yours is not yet in. Investor portfolios are often available to peruse beforehand in places like LinkedIn or AngelList.
Not preparing for conversation
You can rehearse your deck repeatedly until it’s perfect, but it means nothing if you’re not able to engage in a two-way conversation with the investor. Sometimes investors prefer to ask questions and discuss their concerns upfront instead of sitting through a presentation. Always have your pitch prepared, but also practice for a more conversational meeting so you’re not caught off guard.
Not admitting competition
It may sound like the perfect thing to include, but stating that there is no competition surrounding your business makes you seem ill-informed. Just because you haven’t heard of another business like yours on the market, doesn’t mean another startup doesn’t exist somewhere else. Instead, prove why your business would stand out amongst other possible competitors.
Not backing up your assumptions
Investors don’t want to hear free-standing assumptions; they want proof of profitability. Support all of your expectations or ideas with data, whether it’s sharing your customer acquisition cost or—if your business is still in very early stages—basing them on a similar company’s figures.
Not following up
Whether or not your meeting was a success, it’s important to follow up. If the meeting went well, ask the investor what further information he or she needs or how to take the next step. If your business just wasn’t the right fit for the investor, ask if he or she can point you toward anyone who may want to help. You may also want to ask the investor if you can share future business updates—he or she may be interested in supporting you later down the line.