Understanding what others have done wrong is the key to getting your pitch accepted by angel investors. Although their efforts may not have been successful, that doesn’t mean yours will. You can learn from their mistakes and gain the confidence you need to succeed. Here are the top 10 most common mistakes entrepreneurs make when pitching investors on their big idea.
1. Pitching an investor that isn’t interested
While you might want to invest in a specific investor, soliciting funds from an investor without permission could result in your name being blacklisted by the investor circle. For the best chance of rising to the top, only invest in people who are interested in your market and your company.
You can increase your chances of landing a deal by recognizing which private investors have vested interests in your company before you start pitching them. This will save you time and avoid wasting your time with an investor who has no interest in doing business.
2. Excessive Business Plans
A well-crafted business plan is an excellent business decision. It is essential to make your business plan easy to read and understand quickly. This will help you stand out from the rest. Too many entrepreneurs become too focused on their ideas and overwhelm private investors with details that only add to the problem. Investors can lose interest quickly if they don’t have enough time or patience to read through the proposal.
Instead, give them a brief but comprehensive executive summary and a PowerPoint presentation that they can easily navigate. If they have any questions, they will be happy to ask. It’s better to explain the basics in a clear and concise manner than trying to bore them with too much information.
3. Failure to Show the Market Opportunity
Your pitch is your chance to demonstrate the potential of the opportunity to your angel investor. You want them to join you on this journey. Let them know the market potential and the potential for growth.
It can be dangerous to assume that your private investor has a good grasp of the market. Your pitch should be used as an opportunity to educate and inform them about what you know and why you are so excited.
4. You ignore your competition
It may be a bad idea to pitch a pitch in which you ignore your competition. Your seed investor is acutely aware of the fact that there are other pitches. They want to know about your competition and what they mean for your startup.
Do your research on your competitors. Be prepared to share with your business angel the differences between your startup and their established business and how you will surpass them. You’ll be more successful if you have a plan of action and recognize your competition.
5. Not Showing How The Product Works
Even the most experienced entrepreneurs can feel nervous when presenting a pitch to angel investors. This is why many new business start-ups struggle to demonstrate the product’s functionality. They neglect the demo part of the pitch and the actual show that seals the deal.
Your business angel should know the problem that your product solves. Make sure you explain the process to them. Show them examples and ensure that you have defined the concept clearly before sending your pitch.
6. The Team is not being taken seriously
Don’t forget to bring your team to support your pitch to angel investors. You should highlight their talents and skills as they are an essential part of your company. Lean on them to help you present your pitch and make use of their expertise to your advantage.
Angel investors love to see the best people for a startup. A good team can help you get to the next stage of funding.
7. Unrealistic Values
A pitch to investors with a valuation that is too high may not be the best way to get interested from seed funders. The impracticable valuation will immediately turn them off, and they may even oppose the rest of your pitch. Be honest in your valuation and be prepared to support the number that you provide.
Accept your valuation if you are confident. During your pitch, show your investor you are worth it and give evidence to support your valuation.
8. Failure to Research Can Harm Your Investor
Do your research on potential investors before meeting them. This is one of the best things you can do for a startup business looking to pitch an investor. It is essential to know about their business interests and their accomplishments. You should also be able and willing to share your past. You can feel confident that they have done their research on you, and the more you know about them, you will be able to make informed decisions.
You can avoid making the same mistakes as other entrepreneurs to give yourself the boost you need during your pitch to angel investors. These mistakes can be used to your advantage and help you impress your angel investor to close the deal that you want for your startup.