Pitching investors for funding can be nerve-wracking, but it’s inevitable as a startup scales.
A common mistake entrepreneurs make is having a pitch deck that is too complicated or too long. Keeping these two things in mind will make things a little easier.
But there are other mistakes that many entrepreneurs make. Insider spoke with successful entrepreneurs and investors to find out the top five mistakes entrepreneurs make when pitching. Read it and you’ll be able to fix your fatal mistake and possibly avoid missing out on a once-in-a-lifetime fundraising opportunity.
1. Listening to pitches doesn’t envision a “story”
“Storytelling is especially important in the pitch decksays Andrew Parker, founder of senior service Papa, which raised $18 million in Series B funding in September 2020, bringing its total funding to $31 million.
Andrew Parker of Papa, which has raised $31 million in funding, says storytelling is key at the pitch deck.
When he pitched Papa to investors, Parker first focused on the problems Papa would solve. He also didn’t forget to give investors an overview of the size of the industry, citing relevant statistics such as America’s 50 million senior population and how social isolation costs $7 billion a year in losses.
“I recommend using the title of the slide as a story frame,” Parker told Insider. “If investors only read the title of the slide, is it written in a way that makes them willing to invest?You should think about it.”
When Parker created his pitch deck, he summarized the main points he wanted to convey in the headlines. In particular, the elderly care industry is growing in importance, and he told investors that Papa could do well in that market.
2. Full of stats, quotes, and logos
Clockwise co-founder Matt Martin says statistics and data points are essential for any pitch, but not alone.
“Statistics and data points are essential for any pitch, but they’re not enough,” says Matt Martin, co-founder of automated scheduling service Clockwise. In 2020, Clockwise raised $18 million in Series B funding, bringing its total funding to $31.6 million.
Speaking to Insider, Martin said in an email:
“I see a lot of cases where decks are ‘not seeing the forest for the trees’.Tell the story clearly, then flesh it out with data, quotes, logos, etc.I think it’s good.”
Like Parker, Martin says it’s best not to get bogged down in numbers. Try to find a balance between storytelling and details that clarify the mission of your business.
“Although key numbers, customer quotes and headcount charts are important, the main goal is to tell a compelling story about why your startup can grow so much in the years to come.”
Data, quotes, and logos are all raw materials that flesh out the story you want to tell, says Martin.
3. Relying too much on jargon
“We tend to use unnecessary details and jargon out of fear of appearing unsuitable as an investment.. It makes the deck harder to read,” says Russ Heddleston, co-founder of DocSend, a platform for securely sharing documents.
DocSend has so far studied thousands of pitch decks sent to investors using its platform. Heddleston himself often reads these materials and decides whether to send them to venture capitalists (VCs), but he says he doesn’t send presentations that contain a lot of jargon and confusing phrases.
“It’s like, ‘I’m not going to invite you to meetings because I don’t know what the business is,'” Heddleston says. “For example, how does blockchain connect to the dog-walking market?
4. No mention of competition
Anne Dougall, founding partner of Female Founders Fund, previously told Insider, “Don’t turn a blind eye to the competition. Make sure investors understand the market landscape, key players and competitors. We should show investors that we have.”
The fund invests in early-stage technology companies run by women, and Degal says she often sees pitch decks that don’t mention competition. Show investors that you’re also researching your competition. Startups have competitors.
“It’s wonderful to have interesting ideas and to find exciting business buds. ButAs an investor, I would also like to know what is already in the market.Yes,” says Dougall.
5. Too much information
Samia Sumaichi, founder of GetAccept.
It’s tempting to cram a pitch deck with information, but simplicity is best.
At the end of the day, “investors are often generalists, not specialists,” GetAccept founder Samia Sumaich told Insider. The company, which operates a sales platform, raised $20 million in Series B in December 2020, bringing its total funding to $30 million.
Smaichi says. Investors want to know if the problem you’re presenting is important, if there’s a market for your product, if your team can execute as planned, if your solution is out there in the world. Is it something like changing the
“The point of the pitch deck is to make it easy to follow where the red thread is connected, centering on the story that connects the dots.”
Don’t add unnecessary slides for a clear pitch deckSumaichi points out. The number of slides should be about 8 for early stages, and about 14 for more advanced startups.
Furthermore, if you pitch to an investor who doesn’t know your industry or market in less than 20 minutes, can he explain your product and give you feedback after the pitch? Sumaichi’s advice is to take this into account when determining the content and granularity of your deck.
*This article first appeared on March 29, 2021.
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(Translated by Makiko Kaiser, edited by Ayuko Tokiwa)
Source: BusinessInsider
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