What are the most common mistakes in startup pitches? (Probably not what you think)
Here’s a post I did on Quora about what the most common mistakes in startup pitches are. Most people focus on things like “Follow Guy Kawasaki’s 10 slide outline” or “Spend x% of the time on market size, then financials, etc.” but there are other factors that are outweigh all of those.
Agree? Disagree? Let me know in the comments! Alright here we go:
1. Not getting a (really) warm introduction
The colder the introduction, the lower the chances of your success. You may be asking “If I’m pitching, doesn’t it mean the intro (or lack of one) has done its job?” Not really, some investors will take a meeting even with a really lukewarm intro but there’s a 99% chance they’re not investing anyways, they’re just being courteous to the person that introduced you. I’ve been in presentations like that, it’s horrible. Everyone knows it’s a formality.
Here’s just one VC talking about this, but try Google, there are a million more:Catalyst Ventures Brian Rich: How to pitch a venture capitalist
2. Not doing your homework on the investor and audience
I don’t mean just reading their bio on their website. I mean scanning their twitter, any LinkedIn articles they post, any guest articles they’ve written, maybe a blog they have, and overall “hacking their mind” (How to Hack Someone’s Mind).
Read what they’ve written, read what they comment on. This is the closest you’ll get to really knowing a person without meeting them.
3. Asking the investors’ portfolio company executives for advice
If you do this, you’re better than 80 – 90% of other founders. (That number is intentional, it’s not 99%, a decent amount of competent founders do this now). Startup founders LOVE giving advice (while complaining about how busy they are) because it makes them feel important and most of the time they feel like they’re treading water (don’t hate me, it’s true).
So reach out to them.
Don’t complain that “I don’t know them!” or “I’m not well connected!”. Really scour LinkedIn for a possible connection, stalk them on Twitter, find their email somehow, and if all of that fails, just fork over $20 for a month of LinkedIn Premium. If it’s not worth $20 to possibly raise millions, you should re-asses what you’re doing.
The previous founders the investor has funded are GEMS. If they tell you even ONE thing about what the investor loves or hates, your effort was worth it.
It’s like someone trying to hit on your best friend asking you what they love and hate first. Wouldn’t you LOVE giving them that advice? Especially if you thought they were a good fit? Of course you would.
4. Ignoring advice on keeping your presentation short
I know of a company that raised $30 million from a prominent firm with a 6 slide deck. (Such is the power of the first 3 points above). If you’re asking “How is this possible?” You should be asking instead “How is it possible for me to explain everything about my company in a single presentation?”
An initial investor pitch is like the first time you meet someone. Your goal is to come across as interesting (and valuable) enough to get them to call you back. It’s not to get them to marry you right there. Don’t go into your life story, just make it clear why you’re hot.
5. Not talking about your team first
If you do any research on what a VCs want — ANY research at all. You’ll read “team, team, team, team” over and over again. And yet, I see deck after deck where the team is the last slide. It’s amazing. In fact, I have clients that despite my advice, INSIST on putting their team slide at the end. It’s infuriating. I’m getting pissed off just writing this…
6. Not putting your hottest attribute first right before your team slide
The number 1 reason founders don’t put their team slide up front is because they’re embarrassed about their lack of experience. Fine, then wow them with the hottest attribute about your company first, THEN put a team slide in. And transition to the team slide by saying “…we’re really proud of this, it look a lot of hard work…and it was only possible because of our team…”
Which brings me to…
7. Not projecting confidence
Can socially awkward, quiet, not confident founders get funded? Yes of course. Does it help? HELL NO. Who wants to give millions of dollars to someone who can’t even give a 30 – 60 min presentation without stumbling or sweating bullets.
Why do you lack confidence?
8. You haven’t practiced…again….and again…
You need to practice the shit out of your pitch. Know how to give it in 10 min, 30 min, or other time increments. Practice it in front of your colleagues, in front of friends, in front of the mirror, with a video camera. Practice!
Why are you still not confident?
9. You haven’t done enough with your actual company yet
…to have a good pitch. What I mean is, say Mr. Slick who has an apartment in SOMA, knows “the twitter guys”, “has a buddy” at TechCrunch, and “has an in” with VCs decides to start a company. You might think “Man, he’s got it a lot easier than me” and feel dejected. The reality is…he probably does. But so what. You have two choices: 1) give up or 2) not give up. There’s nothing weak in choosing 1) but say you want 2). Do something to improve your chances of success…
The best way is to show some traction before the pitch.
All of the above points become less relevant for a company that is ALREADY profitable. (Yes, that’s hard, but there’s something in between profitable and nothing.) Even if your team is weak, if you’ve done a lot of impressive work beforehand, you can wow them with point #6 and say “Look at all these customers we’ve acquired and money we’ve made with only Bob’s parent’s loan and us moonlighting. Our attrition rate is tiny and referrals are incredible. This is textbook product-solution fit. We think we can prove initial scalability with $x in y months. At that point our valuation will skyrocket.”
The investor isn’t likely to be on their iPhone after that.
10. Why does every list need to have 10 points?