If you’re on your way to the next big pitch (or coming back from one), let me assure you there are probably at least five reasons that this one is going to go horribly wrong.
1. You told investors what you wanted them to know
Investors don’t care that you tell them every last bit about your industry or big idea. They care about a few things that matter – like how they are going to make a lot of money on this deal.
Sitting around telling investors about the inner workings of your software (without being asked to) is like a car salesman trying to tell you how the axles on your BMW were constructed – who cares?
2. You gave them conservative projections
Every entrepreneur thinks they are making conservative projections in their financial statements. You can’t win here. Either you’re going to shoot way too high and you won’t be believable or way too low and the opportunity won’t sound “big enough”.
Do both. Give them a best case and worst case, and more importantly explain why they would be the best or worst case. Every projection is based on a few assumptions (like revenue per customer, or cost per acquisition of a customer) that drives the projections. Focus on those.
3. You have a “really big idea”
No kidding. So did the last 5 million entrepreneurs that walked through the door. What did you think the last guy said? “I’ve got a really small idea that probably won’t make much money and features a completely undesirable product.”
Present the idea at face value and let the investor determine how big it is.
4. You have zero competition
The last thing an investor wants to hear is that you have zero competition. Think of a single business that is successful that has never had competitors.
Investors aren’t looking for a space with no competitors, they are looking for a space where you can kick your competitor’s ass thoroughly. Competition means there is a market for your product that someone other than you can see.
5. You don’t need another round of capital
Yes you do. Of course you do – you’re a growing business that needs to grow faster than it possibly can with the amount of capital you have. Saying that you’ll never need more capital is like saying that your business will never grow fast enough to need it.
Remember, growth requires lots of capital, no matter what. Even super-healthy, highly coveted businesses need more money to grow faster. Don’t be afraid to say “more”!
… be smart about it, folks. Investors have heard all the cheap sales lines, all of the “this is going to make you rich” speeches. Present the fact that they want to hear as they want to hear them and you’ll be slightly less likely to be made fun of – slightly.