The secret to getting your business startup pitch accepted by an angel investor comes down to understanding where others before you have failed. While their attempts may have been fruitless, it doesn’t mean they yours have to be. Learning from their mistakes can give you the edge you need to succeed and garner the attention of a private investor to take your business to the next level. Here are the top 10 mistakes that entrepreneurs make when it comes to pitching an investor on their big idea.
1. Pitching An Investor That’s Not Interested
Sure, you may want a particular investor to seed your business startup, but soliciting a funder without permission can get your name blacklisted in the investor circle. Stick to investors that have shown an interest in your market as well as your company for your best shot at rising to the top of the crop.
Recognizing which private investors are vested in your company before you pitch them can increase your odds of scoring a deal and prevent a time-consuming dance with an investor that has no interest in doing business with you.
2. Excessive Business Plans
Having a thorough business plan to provide to angel funder is a savvy business move. Making sure it is readable and easy to absorb quickly will set you apart from the crowd. Too often entrepreneurs get hung up on their idea and can overload a private investor with too many details that are just nuances to them. This can cause an investor to lose interest quickly as they don’t have the time or the patience to fully read the proposal.
Instead, try to include a short but detailed executive summary and a PowerPoint deck that they can page through. They will be sure to ask you questions if they need additional details to make their decision. It is better to give them the highlights in a concise and informative way than bore them into submission with your overabundance of information.
3. Failing To Show The Market Opportunity
During your pitch, it is your opportunity to show your angel investor the potential of the opportunity at hand. You want them to embark on the journey with you, and you need to seize the moment. Show them the market possibility and let them see the burgeoning potential before them.
Assuming that your private investor is already versed in the market can be a mistake that you may regret. You need to use your pitch as a chance to inform and educate them on what you know and are wholeheartedly excited about.
4. Ignoring Your Competition
Going into a pitch where you choose to ignore the competition may not be the best move as your seed investor is keenly aware that you have competition. They want to know who they are and how dangerous they are to your business startup.
Do your homework on your competitors and be prepared to tell your business angel what separates your business startup from their established company and how you plan to excel past them. If you go in with a plan of attack and acknowledge your competitors, you’ll fare better and show your experience in the industry as well.
5. Not Showing How The Product Works 1133 angel number
Presenting a pitch to an angel investor pitch can make even the most confident of entrepreneurs wrought with nerves. This can explain why many first-time business start-ups fail to show how their product works. They forget the entire demo aspect of the pitch and the real part of the show that helps seal the deal.
Let your business angel know what problem your product or service solves. Be sure to walk them through how it works. Give them samples and make sure before you send your pitch that they understand it as intimately as you do.
6. Sidelining The Team
If you bring your team for support to your angel investor pitch, don’t forget to include them in the presentation. They are a valuable part of your business, and you need showcase their skills and talents. Let them help present the pitch and use their areas of expertise to your advantage.
Angel investors like to see all the people that will help a business startup thrive and a good team backing you can help push you to the next phase of the funding process.
7. Unrealistic Valuations
Going into an investor pitch with a valuation that reaches the sky may not be the best strategy to gain interest from your seed funder. They will be immediately turned off by the impracticable number and show opposition to the rest of your pitch. Be frank in your valuation and be ready to support the number you have provided.
If you feel your valuation is dead on, go with it and be confident in your decision. Show your investor your worth and provide evidence to back your valuation during your pitch.
8. Failing To Research, Your Investor
One of the most important things you can do as a business startup looking to pitch an investor is to do your homework on them before you meet. You should know their business interests as well as their achievements and be able to recite their history forward and back. The more you know about them, the better, as you can be assured they have done their homework on you.