Trying to sell yourself and your company in front of a panel can be downright terrifying!
I've done more than 100 pitches in the last six years all across this country.
I've experienced many successes, including raising $30 million in venture capital from institutional investors. But I've also experienced some failure-I've seen quite enough rejection letters, thank you very much.
My successes and failures have taught me several important lessons that I'd like to share with you.
I'll be at the INBOUND 2016 pitch-off event in Boston in November. These are some tips to improve your pitch whether you're standing in an office in front of an investor or on a stage. Here are nine mistakes guaranteed to mess up your pitch to VCs.
Mistake #1: Not Researching the VCs You're Pitching
VC pitches are won and lost long before the actual pitch even takes place. Is the VC firm you're pitching actually interested in whatever idea it is you have to sell?
You need to find out whether you're a fit for the investor you're pitching. Otherwise you're, at best, wasting your time and theirs. At worst, you're giving away valuable business secrets to people who have no intention of investing in your company or might even steal that information for their own gains.
You must research VCs to:
- Look at their past investments. Do they invest in huge companies, medium-sized companies, or startups? Generally, VCs focus their investments on one companies of a certain size. Pitching your startup to a VC who only invests in larger companies is a mistake.
- Make sure your potential investor isn't investing in one of your competitors. It's unusual for a VC person to make two bets in the same space. If they do take a pitch, it might just be they're trying to find out what the competition (you!) are up to. Avoid this huge mistake.
Mistake #2: Not Customizing Your Pitch
Some people will pitch 50 companies with the same deck. Spraying and praying is a massive mistake and a missed opportunity.
Do some research on the individuals you're pitching. Really customize your pitch to the people you'll be talking to.
What do they like? Find out. Start by reading their blog posts and tweets. Go deeper by searching for them on Google, looking for any other public profiles, information, and mentions to discover and incorporate their interests into your pitch.
Mistake #3: Being Too Stubborn to Stop
Hearing a concern from a VC once could just be a fluke. Hearing it again could be a coincidence. But hearing about the same issue three times? Uh oh, we have a trend.
If you hear the same objection three times or more, stop pitching immediately. Address those issues before continuing. Continuing to pitch with known issues is just wasting the time and patience of a finite number of investors.
People who pass on the first pitch won't want to magically invest in it six months later. It's kind of like dating-there has to be an initial spark if you're ever going to fall in love with each other.
Mistake #4: Being Defensive
When someone disagrees with you, your first reaction might be, "I don't agree with you." Saying these words out loud, however, is one of the worst mistakes you can make.
Your investors are writing the check. That means they ARE right. They don't owe you their money.
It's important to think of every possible reason that people could shoot down your idea. You need to figure out how you can address these objections in a non-defensive way.
Mistake #5: Being Boring
For every pitch deck that succeeds, there are probably 50 to 100 that fail to win over reluctant investors. Why? My theory is most pitches are super boring and forgettable.
When pitching investors, try to be more memorable. Use content marketing tricks to help your pitch be remarkable in some way.
If you wanted to be funny, for example, you could build your presentation around a theme based on the hilarious HBO show "Silicon Valley."
Mistake #6: Projecting the Wrong Image
Investors have to decide whether they are going to drop thousands or even millions of dollars on you based on a discussion that lasts a few hours. If you want to sabotage your chances, projecting the wrong image will surely lead to failure.
When I was pitching, my strength was software engineering, so I dressed the part. I didn't want to project, through what I wore, that I was some kind of financial wizard with years of experience.
You can tell people a lot without saying a word. So always be intentional about what you're projecting, whether it's through what you wear or your body language.
Mistake #7: Not Reporting on Your Progress
You were rejected by every VC you pitched. You kept receiving the same sort of feedback. Eventually, you listened. You acted on their recommendations.
Now it's a year later. If you don't follow up with VCs to report on the progress you've made, it's a mistake. Following up tells VCs two important things:
- You're able to listen and valued their recommendations
- You're the type of person who can do the necessary hard work. After updating investors who turned me down initially, I ended up with multiple term sheets.
Mistake #8: Doing Formal Pitches
Not all your funding will come through formal pitches. In fact, you can raise a lot of money by informally talking to investors.
For example, you tell an investor, "Hey, I have this idea. I'm not really looking to raise money, but I need your advice." Or, maybe you could say, "Hey, could you point me in the direction of an investor who likes to make big bets on proven idea with high risk and high returns?"
In both of these cases, you're using a little bit of reverse psychology. The goal is to make the investor think, "Hey, I want to do that! What about me?"
Mistake #9: Not Addressing Deficiencies
If you know your company has obvious deficiencies, be up front about them in your pitch.
By addressing any issues, you'll basically inoculate yourself from criticism.
Failing to be honest with investors will only lead to rejection.
Following this advice on how not to pitch should help you get it right next time, whether you're standing in an office in front of a potential investor or on a stage before a panel of judges and an audience of thousands at a pitch-off event.