Three mistakes to avoid when pitching » SMEInsider

Three mistakes to avoid when pitching

Companies pitching for investment make common mistakes that seriously undermine their chance of funding, according to venture capitalists Sanjeev and Sandeep Sardana.

1. Not focussing on the problem

Any new venture should have a clear idea of the problem that their company seeks to solve and this should be the focus of their presentation. Instead, say the Sardanas, they often go into intense detail about every other part of their proposal but fail to cover this all-important point.

Rather than launching straight into in-depth financials and technological descriptions, “Taking the time to frame your magical solution against a well described problem is the best way to set the stage for your pitch,” say Sanjeev and Sandeep. Bringing the product to life with case studies, prototypes, animations or wireframes will also help to capture an investor’s imagination.

2. Claiming that there’s no competition

In the rush to demonstrate that they are unique or have found a gap in the market, entrepreneurs often play down the competition or even say that there is none. Rather than making you seem more attractive, this can actually hurt your case by making it seem like you don’t understand your market well enough to appreciate the role of indirect competition and how you will stand out from it.

If you wish to be taken seriously, never pitch without describing the competition and a plan to tackle them. When competing with another startup in the same space be ready to explain your differentiated angle,” say the Sardanas.

3. Skills gaps in your team

You might be a bona fide IT genius, but if you don’t have the skills to grow a business, and you haven’t found a co-founder that shines where you flounder, you won’t be winning over VCs any time soon. Equally, getting sucked in by a co-founder who is simply bandwaggoning your idea is also a warning flag for investors; you must make sure that whoever you go into business genuinely adds value to your business and is willing to deliver.

Startups are hard work and can destroy your sanity if going it alone,” say Sanjeev and Sandeep. “You’re better off with co-founders who complement you and there to bounce ideas or share in miseries if things don’t go right. Consequently seed and early stage investors most often pick good teams over good ideas. And when pitching the team, instill confidence in your investors by taking the time to demonstrate how the team complements each other and how it would function well together.”