It’s a shitstorm of red-tape, financial forecasts (which are hard), data analysis, and rejection (which is harder).
And it’s also a journey I’m on myself, right now. Along the way I’ve made some truly school-boy errors that make my face turn an uncomfortable shade of crimson just thinking about them. I’ve also collected a vast amount of wisdom from supportive mentors, great founders, CEO’s and VC’s that want to see me succeed because they believe in the idea I’m trying to take from concept to market.
So if you want to avoid seeming amateur and sheepish when you get your chance to pitch to some of the big guns, here are 5 definite no-no’s I’ve learned the hard way.
Does your mother know what you do?
How would she explain it to her friends?
If she can’t, thats not her fault. It’s yours.
Boil down what makes your idea special into simple, easily replicated language. Its not dumbing it down or diluting its integrity, its making it easily accessible for people who operate in a different world. Think Grandpa Pete who can hardly use his phone. Complexity of language is not tantamount to complexity of thought. Jargon, buzzwords, and superlatives make the essence of your ideas harder to digest because your audience are too busy chewing on the fatty word tissue you’re throwing at them. If you cant explain what it is your company does in 15 seconds, then your vision is probably somewhat distorted and needs refining.
Explaining what you do based on the we are a ‘this-for-that’ formula is great for giving your product/service context really quickly.
‘So, erm, basically… we are like, the Facebook for dairy farmers’.
Awesome. But all I heard was ‘Facebook’.
If you really are the Facebook for dairy famers then great, by all means go ahead and use the comparison. But it also pigeonholes you. It connotes that your idea is devoid of originality and lacks lasting power. It appears opportunistic. And, for potential investors, it automatically seems like you are trying to compete on a playing field against very established companies — or at least appear as feature or subset of the afore mentioned company — where the odds are sacked ever with your adversaries.
So, how can we avoid using the ‘this-for-that’ comparison without losing the inherent simplicity of the formula?
Adeo Ressi suggests this single sentence, fill in the blanks pitch:
Its punchy, quick, and informative.
I was given this advice by someone who has raised significant capital for his own companies and for those of others. Have a great idea. Build a basic business plan. Hustle your way into a room with someone who can fund it. Present your idea clearly and concisely. Then ask them how you can improve it or build a better monetary model. If they believe in your idea or give you advice so sound that they think this could be the next big thing, that ‘advice’ may come complete with a cheque payable to your name.
Too many startups (especially cAPPitalists) spend far too much time, sometimes months or even years, perfecting a product/service for launch without even testing the water. They think they have an idea people want, and when its launch is ultimately met with indifference or apathy the start-up falls flat on its nose.
This is easily avoided, and the implementation of a *build-measure-learn *feedback loop methodology means you can collect imperical data to present at an investment pitch that will give your figures/projections a little weight and make them seem less like artistic falsehoods or lamentable inexactitudes. Find a problem (preferably with a solution that can be monetised), develop an MVP, ergo, a product that has just those core features that allows it to be deployed to a subset of potential customers likely to give feedback, and begin the learning process. If your feedback tells you that you’re building a product/service the market doesn’t want, then pivot, iterate, and try again. That data will be invaluable to any VC or investment group — they’ll always expect a certain level of market research.
Rejection letters are lacerations of the soul. They hurt. They’re frustrating. They’ll bring you close to tears. But there is no real way around them. In our quest for funding it is inevitable that we’ll encounter rejection. Or the terms of what we’re asking for will require the yielding of such a substantial equity stake in our brainchild that it seems like we’ll lose creative direction before the fun has actually started. So we say no. But never give up.
The founder of Pandora was rejected by 300 investors before he got a yes.
You’re in this for the long haul. So thicken that skin and keep on going.