You're trying to raise money for your business. The competition for investment dollars is fierce. It can be difficult to know exactly what to say and do to win over potential investors. But there are some things you absolutely want to avoid.
Scroll down to see five big mistakes entrepreneurs make when pitching.
Acting like you know it all. A little humility goes a long way, especially with more experienced investors. You might even find that the information and advice they have to offer is more valuable over the long term than the money itself. Be willing to listen and learn. If your attitude is “just give me the money, I know what to do with it”, chances are you’ll get no money and be told by the potential funder exactly what to “do with it”. Know what we mean?
Selling an idea . . . and that’s it. Unless you’re a Greek philosopher circa 450 B.C. or a New York Times opinion writer, nobody is going to give you money just for having an idea. You get funding because you have a way of monetizing that concept. Be prepared to demonstrate to potential investors, step by step, how you are going to turn an idea into a business. Remember, funders expect you to be able to answer one fundamental question: “What’s in it for me?” And that is most definitely not a philosophical query.
Looking like a mess. Let’s get it together, people! Put on a nice outfit. Comb your hair. Get rid of whatever the hell that thing dangling from your nose is (no, dammit, with a tissue!). You don’t have to look like an extra from Wall Street or Downton Abbey, but be presentable and organized both in how you look and how you communicate. Remember, you’re asking potential investors not just for money, but to trust you to be able to use it to effectively build a venture from which they’ll ultimately profit.
Overpromising. Investors understand that funding any business is inherently risky. So if you’re sitting there promising a ridiculous rate of return or guarantying that the venture can’t possibly fail you sound at best like an idiot and at worst like a scam artist. Convey that you appreciate both the risk the investor will be taking and the confidence that person is showing in you. Demonstrate how you will be a good steward of her money. Showing that you respect the reality of the situation is a good way to establish yourself as a serious entrepreneur.
Lying. You told the potential investor you went to Harvard Business School, but it turns out it was only once and that was to use the bathroom on your way to your job at the Starbucks in Cambridge? These guys weren’t born yesterday. They will make sure you are who you claim to be. If they can’t trust you to be honest with them, they won’t trust you with their money. Nor should they.