Pitchfalls: 10 mistakes to avoid when you pitch to investors

You’ve built up your company’s profile, gone searching for investors and now you’re getting the chance to pitch. Nice work!

But here’s the catch: investors hear hundreds of pitches. So what can you do to make sure you absolutely nail yours and win that investment?

We’ve asked founders and investors about the most common mistakes they see during pitches so you know exactly what NOT to do.

1. Don’t forget about your elevator pitch

It’s easy to focus so hard on perfecting your pitch deck that you neglect your elevator pitch. But your elevator pitch is often your very first chance to grab an investor’s attention. This might be at an official pitch event, an on-the-spot introduction or literally in an elevator. Wherever you are, you probably only have 60 seconds to sell your idea.

Explain the problem and how your business will solve it. Don’t get caught up in the details. Be selective and figure out the key things you need to say to spark interest so an investor simply has to follow up and learn more.

2. Don’t sell the what, sell the why

Sure, you might have created an amazing bit of tech but if it’s not fixing a problem for your customers, no one is going to want it. You might geek out on the intricacies of your product but what an investor really needs to know is why you’re building it. Because that need means there’s a market.

So don’t use your pitch deck to explain exactly how your product works. Start off by telling your investor what the problem is and how crazy it is that this problem exists.

Now this is where your product comes in… say how you’re going to solve this problem and why you and your team are the best people for the job. Also outline the market size, any traction you’ve got and your five-year business plan.

3. Don’t avoid asking for cash

You’re sending an investor your pitch deck because you need something from them. So don’t shy away from talking about money!

The last slide of your pitch deck should always outline what you’re asking for. Be clear about how much you are raising and what you plan to do with the money.

If you’re offering SEIS/EIS, make sure you say so! Many angels and VC funds will only invest if SEIS or EIS is on the table so get your Advance Assurance sorted before you start speaking to investors.

4. Don’t ask an investor to sign an NDA

Asking an investor to sign an NDA is a quick way to get an immediate no. Firstly, they’re receiving so many pitches that an NDA is too much effort. Rather than read an NDA and go back and forth with changes and lawyers, they’ll just move on to the next pitch.

Secondly, it could make them liable if they’ve already invested or end up investing in a company with a similar idea to yours. That NDA could get them in hot water later on and it’s not worth the risk.

Investors aren’t looking to steal your ideas and set up a rival business; they want to put money into great teams who can implement ideas. So forget about the NDA and get your pitch in front of them.

5. Never send someone else to pitch for you

Investor outreach and pitching might be the last thing you want to do. It’s incredibly time-consuming when you want to get on and build your business. But don’t even think about outsourcing it.

In the early days of your company, it’s your job to sell your idea. You need to convince team members to come on board and show customers that they simply have to have your product.
Getting your assistant to send cold outreach or sending an advisor to pitch in your place is an immediate red flag to investors that you won’t be able to sell your company and win customers.

6. Don’t skip out validation

A common mistake founders make is to explain their great idea then skip straight to how they want to fund, build and sell it. They miss out a crucial step: validation.

Investors want to see proof that you don’t just think your idea is good but you have an audience that does too. This doesn’t mean you have to have built your whole app yet but talk to people, understand your potential users, collect testimonials to back you up. If you can, invest some of your own money into building a prototype to get some early testers and traction.

There are plenty of no-code apps out there even if you don’t have loads of technical skills.
This way you’ll be able to let the numbers talk. The more you validate your idea, the more hard evidence you’ll have to show an investor that there is a genuine market for your product.

7. Don’t bluff your experience

Unless you’ve got several exits under your belt, you might be worried about convincing an investor that you’ve got what it takes. But don’t over-inflate your experience or team – investors will see right through it.

Focus on the expertise you have built so far and why you’re a team that’s going to work well together. You want to reassure your investors that, as founders, you’re going to stick together. Founder fallout can kill a business so if you’ve worked together previously at another company then there’s more proof you’ll work well together.

8. Don’t pit investors against each other

Just like you shouldn’t bluff your experience, don’t try to pit investors against one another. If an investor is interested, it’s because they like what you’re working on. They’re not going to suddenly become interested just because you pile on the pressure by saying someone else is keen.

9. Don’t be afraid to ask the tricky question

It’s okay to ask an investor, ‘So, are you going to invest?’

Your time is valuable so you don’t want to waste time chasing investors that are never going to write a cheque. Treat fundraising like sales. Keep track of who you’re talking to, what they might invest and how hot the lead is.

You can tell an investor is thinking seriously about your idea if they’ve asked for follow-up information, like taking a look at your term sheet or data room. But it’s also okay to be direct and push for an answer. As long as you’re respectful, it shows you’re serious and are working efficiently to qualify and close leads.

10. Avoid promising an exit

Some investors want to talk exit strategy early on while others don’t. But you should be prepared for the question.

Whether you have an early exit in mind or plan to run your company for the next couple of decades, what’s important is you don’t commit to a prearranged exit. This locks you into selling your business after a set amount of time. But you can’t predict exactly where the business will be at that point. If it’s not doing well, then you’ll have to sell for nothing. Or if you’re doing great, you might be forced to sell before it’s worth even more.

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