5 MISTAKES startups make when pitching an investor

1. Fundraising to hire the essential team

This is probably the most common question I get: a solo founder is looking to raise money to find a CTO, or a CMO/growth hacker.

2. Requesting an NDA

This is just plain rookie.

  • If you are concerned, somebody can steal your idea and beat you to market by just looking at your pitch deck, then that risk will continue to exist when you launch. Companies don’t succeed because of ideas: they succeed because of execution: building great products and bringing them to market.
  • Most investors look at hundreds of deals every month, and it’s a terrible liability to have NDAs with all these companies.

Investors don’t sign NDAs to see your pitch deck. No matter how groundbreaking the product is, no matter how many patents you can get.

3. Approaching the wrong kind of investors

Not all companies can (or should) approach venture capital investors. We talked about this in our Startups vs Small Businesses video.

Silicon Valley Investors expect the business to increase its value in 10X within five years: which requires exponential growth.

Companies that don’t fit this profile can access other types of financing, like loans. They can also raise capital from an investor willing to come in as a 50/50 partner and to be directly involved in the business. There’s also stuff like Kickstarter, which is ideal for hardware products.

4. Trying to raise too much money

I’ve seen entrepreneurs with no team, no product, no revenue, pitching a round of $5MM, which for most industries and most founders, will also be, a rookie move.

5. Showing that you’re desperate

Investors like healthy, fast-growing companies. They are drawn to the promise of great returns! Few investors will want to join to save a business from bankruptcy, because that’s usually just bad business. The least you need them, the better position you have, not only to pitch the company but to have the leverage to negotiate better terms.




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