10 Mistakes To Avoid When Pitching Investors

Like it or not, money is the lifeblood of a business. If you are on the hunt for capital and have landed a meeting with an investor, your first impression can either be a deal breaker or money in the bank.

According to Founder Institute, an early-stage startup accelerator in Mountain View, Calif., one of the biggest flubs rookies make in an investor presentation pitch is failing to include charts and graphs. If you aren’t sure how to go about making charts and graphs that relate to your financial projections, you can consider hiring a business student or a certified public accountant for a day to help. Also, the institute says, steer clear of promising potential investors that your startup is going to be worth $1 billion by its fifth year. Investors want conservative estimates that they can trust, not pie-in-the-sky guesstimates.top-10-fundraising-fails fi1

Other tips from the Founder Institute include:

  • Avoid a “hard coded” financial spreadsheet in your presentation – that is, don’t make your numbers unchangeable in a spreadsheet. Present your information so that investors can play with your various financial inputs to see how your business model will survive in changing conditions.
  • Skip what’s known as a “top down” financial forecast where you assume that your company will automatically win a percentage of some existing market. Instead, use what’s called “bottom up” forecasting, where you base your financial projections on an actual budget: essentially, how many items you are going to sell multiplied by how much each is worth.
  • Talk about the size of your total addressable market (TAM), but don’t focus on it. For example, if you are creating an iPhone game for women ages 35 and up, the size of the entire gaming industry would be your total addressable market and would be largely irrelevant. Instead, research your serviceable addressable market (SAM), which in this example would be the total market for women over the age of 35.

In the infographic, Founder Institute offers a list of the 10 rookie pitching mistakes it sees on a regular basis.

Re-posted from http://bit.ly/YmGcXv

LA Founder Institute

Adeo RessiFounder Institute Session LA: Developing a vision for your Startup Idea took place at Mahalo Culver City Office on May 15, 2013. Adeo Ressi, the founder of FI, was speaking about their program for entrepreneurs right before the application process for LA starts on May 19, 2013.

About 50-70 people gathered to learn more about the program, that is available in 24 countries and 40 cities. It is a 3 months program that costs about $1000. “The Founder Institute is the World’s Largest Startup Accelerator, with a mission to “Globalize Silicon Valley” and help founders build enduring technology companies. Through our part-time entrepreneur training program, you can launch a company with guidance and feedback from experienced startup CEOs – while not being required to quit your job”.

Adeo Ressi introduced his framework.Founer Institue pitch

What is your idea? Can your idea Change 1 mil lives? Can you employ 500 people? Can you run it over 20 years?

Why you? Self-reflection, life narrative, happiness

What is the need? Real demand, customer pain, revenue potential

What is the insight? Unique solution, supports growth, culture – spend time thinking and researching

Validation. Be ready to think about ways to kill your idea if not validated.

So pitch in 1 min: your narrative, your pain or passion, the business, a unique insight and validation. Several people from the audience got up and pitched: online database animal shelters, hackers hacking at resorts worldwide and some other ideas. The LA 3 months Program is Jun 03, ’13 – Sep 09, ’13.