Following on from last week’s post about the 30 Mistakes Tech Starts Make, I’ve followed this up with the mistakes that they make specifically when pitching to VCs.
Again this is based on many years of working with startups and seeing hundreds of pitches – many successful, but mostly not. It’s also worth pointing out that I’m writing specifically about VC investors here.
Before we get started, I’ve tried to avoid duplication with my previous post. So, just because you avoid all these in your pitch, if you fall foul of the fundamental business mistakes I wrote about before, you still won’t succeed.
Finally, sorry if these all seem bleeding obvious. But I have seen founders make every single one of these and in many cases, in multiple times in the same pitch.
1. Not getting an intro from a trusted source. The first test of an entrepreneur is finding a way of getting a warm intro. I know many VCs say that this isn’t necessary, but this is a key facet of human nature
2. Do your research on who you will be meeting. Don’t start lecturing them about what they already know. [I was recently asked if I knew anything about mobile advertising during a pitch.]
3. Asking for an NDA prior to, or in the meeting. VCs don’t sign them
4. Poor pitch deck. It should be a thing of beauty, crafted with the same care and time as your website
5. Poor pitch presentation – practice and hone it until you’re saying it in your sleep. Don’t ever just read your presentation aloud. Think seriously about investing in a Pitch Doctor
6. Not demonstrating the massive size of the market being addressed
7. “If we just get just X% of the market, we’ll make $$Billions”. Top down market sizing is a no-no, but can be a useful tool as a pre-meeting sanity check, but any extrapolation from huge numbers loses credibility
8. Not knowing what crucial KPIs are and not knowing them by heart
9. Getting too technical without being asked or equally saying that the tech is being “dumbed down” for the prospective investors
10. Saying your projections are “conservative”
11. Unbelievable revenue projections in Year 5.
12.Sell the team. Why will they make it happen? What is their previous track record that points to future success? Don’t assume that they know who you are. NB Europeans tend to be overly modest about this
13. Sell the advisory board. What notable industry figures have you been able to attract?
14. Glossing over the importance of market timing – why now?
15. Under-thinking marketing/growth and sales costs. Saying your product will “go viral” is not a good answer
16. Using buzz words
17. Taking too many team members to the meeting. And make sure everyone who does attend has a role
18. Delegating a pitch meeting to another team member. The CEO always goes
19. Arguing with other team members during the pitch and/or interrupting each other
20. Having a part-time Chairman lead the meeting – needs to be the CEO and operational team
21. Taking along a professional advisor and/or intermediary is generally a bad idea – certainly at early stage
22. Claiming to have no competition, dismissing them out of hand and not being able to discuss this intelligently
23. Talking about what an exit will look like
24. Being too conservative about how much you need to raise and what you’ll be able to achieve with that
25. Talking about an impending “big deal” with a big player in the market. It’s worthless until the money is flowing
26. Underestimating in your projections how much more time EVERYTHING takes
And finally, a bonus — Wearing suits (Thiel’s Law)
Thanks to my friend, Charles Seely, for editing and adding to the list, based on his many years of helping startups raising funding.