Very few entrepreneurs are given a chance to pitch their businesses to investors. Unfortunately, not everyone who gets a chance to talk with potential source of financial support receives positive response. The reason: they often commit mistakes when pitching their business startups.
Here are some of the most common mistakes that business owners do when pitching their companies to potential investors.
Long elevator pitches
Elevator pitches are called as such because they are expected to be short – around a minute, which is the average length of a person’s ride in an elevator. And despite being called the “elevator pitch,” there are other instances when business owners are required to be brief when introducing their companies to possible investors. These include chance meetings in cocktail parties, meetings, or even introductions between common friends.
Such cases, which often happen in informal settings, are not boardroom meetings. And while investors may be interested in the pitch, talking about it for more than a minute or two is not appropriate. Doing so may put a bad impression on the part of the investor, therefore losing a possible deal.
Business owners must keep in mind that they should save the talk during an actual pitch.
During the actual presentation of the business, PowerPoint presentations are often considered as God-send tools. It provides the people around the room some visual information that could pique their interest on the topic being presented.
However, business owners must keep in mind that PowerPoint presentations are used as support and are not meant to be the star of the show. Therefore, entrepreneurs must be able to limit the length of the PowerPoint presentation so as not to bore potential investors.
These people want business owners to talk about their business startups and not just read from a prepared presentation.
Business owners want to impress potential investors. However, putting wrong information on the investment proposal, for instance blowing up the exit figures to impossible proportions, often raise eyebrows of investors.
Entrepreneurs must remember that investors value business owners who present them with the reality more than those who make-up information just to impress them.
Early discussion on valuation
Investors often turn their backs on business owners who start they pitches with valuation. Before doing so, business owners are expected to introduce first the business and its operations. Investors are there to provide money, but they would rather hear about the business first before getting information on the valuation which is, technically, their expertise. There is no need to walk them through on this process.
These are just some of the things that business owners must avoid when pitching their businesses to their potential investors. Following this would make them one step closer to getting some financial support.
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