Many of us see dozens or even hundreds of investor presentations each year. Time and time again, we hear certain things said to investors, that make us want to scream ...Oh no, not that again! Don't you folks know better?
While there's no way to think of everything we can tell entrepreneurs to stop saying or doing, the hope here is to reduce the most COMMON mistakes. Once we take care of this list, then perhaps later we can turn our attention to some of the finer points. Each of the examples shown is followed [in brackets] of what investors are probably thinking.
So, try to avoid saying ...
- Our numbers are conservative. [No one asked you for conservative, so can you please just give us the real numbers?]
- Can I just be honest with you? [Yes please, but now what should I think of what you had been saying previously?]
- All we need is 3% of the market. [I can see you are good with math. Did you just make up a number? Why not say 4% or 5%? What we'd like is for you to give us confidence that you can get SOME real sales. For example, can you tell us about current meetings with customers who want to buy?]
- We're going to do an IPO. [Really? Should we rely on your company being one of the tiny handful out of thousands, who will pull off a successful IPO?]
- We have no competition. [There is always competition. Even if it's customers who elect not to make a purchase, that's competition. Okay, let's call them competitive threats. Sound better?]
- We are about to close this big giant deal. [I have fallen into this trap; in fact I have even made the claim myself. As active entrepreneurs, we tend to be true believers that an amazing customer prospect can be real. Just be careful not to get sucked into your own hype.]
- This is the last money we will have to raise. [Your company will probably never stop raising money. Saying you're never going to raise more, makes you sound nave.]
- Telling investors you need the funds quickly. [A great way to get investors to run the other way. Hurry, you must give me all your money before you have time to ask some important questions.]
- Answer their question first. [When the investor asks how much revenue did you do last year... answer it right away. Say $1 million or $10 million, whatever it is. Your explanations can then come next. Don't hem and haw, as it looks like you're avoiding the question.]
- Don't give three answers when there is one good one. [One question deserves one good answer. Too many answers make it look like you need to over-compensate.]
- Show the real product, not a canned demo. [All that matters is what the customer thinks and the only way to know is to SHOW it to him.]
- Don't use clichs or hyperbole. [Avoid comments like: first mover advantage, proprietary assets, experienced team, or like: biggest, greatest, most powerful. Best to give specifics.]