Everyone and their dog has a business idea: “It’s the app for this” or “It’s like Uber, but for this”, you understand.
But no matter how good the idea is, many people still fail to present it correctly, especially when talking to investors.
The truth is that most entrepreneurs have no idea how to present their company well, so the idea dies before it even starts.
I’ve invested in 19 companies, but I’ve heard my fair share of awful pitches.
I also launched five startups and sold two, so I did a fair amount of pitching.
To help combat the bad pitching epidemic, I outlined 10 common pitching mistakes and how to fix them.
1. The speech has too many words.
Investors generally don’t have much time and they definitely don’t have time for terribly proposed ideas.
So, if your pitch is a convoluted mess of buzzwords and unclear jargon, the investor will be turned off. Quickly.
To give you some context, the average investor spends only 2 minutes and 40 seconds watching a presentation.
Let’s assume it’s less than that. Some of these investors are slow readers.
How to fix the error
Keep your presentation short and concise. Twelve slides is a good amount and don’t cram in tons of information.
Be sure to include only the most important points, such as growth levels, financial information, what problem you solve, and how you are solving it.
Don’t spend five slides telling the investor how great the team is. They don’t care THAT much. They just want to know if the idea is good and if you have a plan or if you have been executing it well.
An advantage is to use more images than words. Remember, time is your enemy.
2. Say you have no competition
There is a simple rule for this: if you have no competition, it is because there is no market for your product.
As long as you’re not making up crazy ideas like dog parking sensors (that’s a real idea I read about a few years ago), you’ll have competition. Every business has competition.
Sometimes the competition is well funded, sometimes it is mediocre and does nothing.
But don’t say you have no competition: that makes you look amateurish and disingenuous.
How to fix the error
Take note of the competition, mention them in your pitch deck, and provide 1-2 sentences about how you’re doing against them.
What are its advantages? Where do they have an advantage? How are you going to protect your advantage against them?
Be honest and tactical. It’s your best bet.
3. Not recognizing the competition
The other side of the competition argument is when people say that competitors do everything wrong and you do everything right.
This is as bad as saying you have no competition.
When you say, “All the competition sucks, we’re MUCH better,” it shows naivety. It makes you seem frivolous and ignorant of the businesses that can defeat you.
Not a good idea when you are introducing someone you are asking to invest thousands or millions of pounds.
How to fix the error
Point out where competition is good and where it is bad.
Give specific examples of how you can mitigate your advantages and exploit your weaknesses.
Show the investor that you have a concrete plan to beat them, don’t ignore them.
4. There is no mention of how you will get clients.
Many decks I see only talk in very general terms about how to get clients.
Simply saying “We’ll use social media” or “Word of mouth” is a bad way to explain customer acquisition channels because it sounds like you haven’t thought about it.
How are you going to use social networks? Are you running ads? Are you partnering with influencers? Be specific.
How to fix the error
A better way to do this would be to choose 2 or 3 specific channels that you are going to use and show that you have already tested them and can show results.
For example: ‘Let’s partner with influencers to promote this jacket.’ So far we have partnered with 5 different creators and already generated 100 sales.
Considering we spend £500 to run these promotions it is very profitable as it costs us £5 to get customers but we charge £20 for the jacket.’
5. Show some traction
You’ll have a much better chance of raising money if you’ve already shown some progress.
Too many entrepreneurs come in with hope and prayer and that then depends on whether the investor likes you.
The amount of traction you can show is directly related to a decrease in risk.
In other words, the more progress you show, the less risky the investment will seem and the more likely they will be to invest in you.
How to fix the error
Get some early clients before you raise money. If you can’t do that, get letters of intent from people who say that if you build the product, they will pay for or buy the product.
Showing real customer usage is a KILLER when it comes to raising money. You raise more money, on better terms, from better investors.
Always show traction.
6. Weird math
Something that people do frequently that has failed is top-down market analysis.
Things like: “The market is $100 billion, if we only capture 1 percent of the market then we are a billion dollar company.”
This seems pretty vague and doesn’t reflect well on you as an entrepreneur. It’s an illusion and doesn’t have much substance.
How to fix the error
Be honest and realistic in your mathematics. Make realistic projections for each year and explain how you will move to the next stage.
Yes, projections are just projections, but showing the investor that you have a clear thought process behind how you came to that conclusion is much better than just making a vague, generalized estimate.
Justification is much more important than you think.
7. Unrealistic projections
Many founders ruin their pitch by having unrealistic projections.
This is usually done in two ways:
Investors respect honesty…rather than fantasizing and wishing for billion-pound exits.
- Saying your company is going public when there is no way you can.
- Saying that after year 4, they will make billions of pounds.
This makes you look like an amateur.
How to fix the error
Opt for a lower, more realistic projection.
Investors respect honesty and can now see the likelihood of success, rather than thinking sky high and wishing for multi-billion pound exits.
Realism is a very powerful tactic when used correctly.
8. Say that you are for everyone
Facebook started out for Ivy League kids and then expanded to other colleges. Ebay started out being for collectibles. Amazon started selling books.
You need to really focus on a niche.
A problem I see with many presentations is that they don’t define very clearly who their ideal client is. Instead, they say it’s for everyone, which is never true.
How to fix the error
Pick a niche, then pick a niche within that niche. Become the market leader in this niche niche and then expand.
Momentum is an incredibly powerful phenomenon and becomes much easier when you have a strong position in at least one market.
Think big. Act small.
9. Waiting for prior knowledge
Don’t be too technical.
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Many decks I see assume I know what they’re talking about using a lot of technical jargon and acronyms.
You should assume that the investor is not an expert and has no idea. He imagines you are presenting this to an alien, or a 5 year old… or a 5 year old alien.
Make it so simple that they can understand it.
How to fix the error
Explain the technical aspects in the questions and answers.
Remember that the goal of the deck is to spark interest, not to take the deal.
If the investor understands the technical aspects of the business, they will ask. Otherwise, let the platform do the talking and wait for them to respond with technical questions.
10. Not practicing your speech
It always amazes me when founders pitch and mutter and aaah their way through a speech.
It makes you look like an amateur, and honestly, if you can’t nail down a pitch about your company, how can anyone trust you to execute it correctly?
The risk factor increases with each case of amateur behavior.
How to fix the error
You must practice your tone and you know it like the back of your hand.
However, don’t practice it word for word, rather make sure you know the main points of each slide.
Trust me, this will be enough.
This may seem basic, but you’d be surprised how many don’t do it.
Now that you have a better idea of how to introduce yourself, come and introduce yourself to me. I’m donating $10,000 and Macbooks to three people to fund their business ideas.
If you think you have what it takes, check out the details here.
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