5 Errors to Keep away from When You are Assembly Potential Traders

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Connecting with the right investors can mean success or failure for your business venture. But they’re looking for more than just a great app to fund or a business idea to get behind. They want to make sure the founder they’re investing in is worth their time and money.

Unfortunately, when meeting investors, it’s normal to get nervous and make mistakes, potentially costing you the opportunity of a lifetime.

To make sure you make the most of this amazing opportunity, here are five mistakes to avoid when you’re meeting potential investors.

1. Don’t Pitch the Perfect Picture

Many first-time founders believe that they know what investors want to hear, and that investors want to hear the dream scenario. That isn’t so. Investors are wily people used to seeing and understanding both success and failure.

Founders sometimes try to paint a rosy image, making it seem that their company has yet to meet any setbacks and is likely to achieve record-setting growth rates. No one takes that approach seriously. Instead, focus on giving realistic outcomes and supporting them with details to gain the support of a potential investor.

For example, Uber’s now-legendary 2008 pitch included a slide of likely outcomes, ranging from best to very worst case scenarios, and explanations behind why they thought the realistic one was the most likely. Even the worst-case scenario was still demonstrated to be a win for potential investors.

Investors want to be sure you’re prepared for whatever adversity comes your way. They’re much more likely to be impressed by an analytic outlook, resilience and good judgement rather than by blind optimism.

2. Don’t Waste Your Ideal Investor

If there’s an ideal investor who you think is a sure bet to give you the yes you so desperately want to hear, do not pitch them first. Instead, pitch investors who are less of a sure thing and less of a perfect fit, so you can practice.

Remember that even extremely successful founders have a hard time securing capital. Robbie Allen, founder of Automated Insights, tells the story of how he was seen as “successful” (he ended up raising over $10.8 million) but got rejected 173 times on his pitching journey.

The fact is that if you’re at the start of your pitching, you’re almost guaranteed to make a mistake. You might not know how to answer the hard questions; you might trip up and just get too sweaty and nervous. Come to your ideal investor when you’re ready to meet them at the table, not when you’re a complete newbie.

When looking for pitching practice, you can even try friends and family first – people who will ask you hard questions but won’t ruin your chances when they tell you what you did wrong. You’ll only get one chance at that perfect investor. Make sure you’re ready for that chance.

Startup investor meeting

3. Don’t Forget to Look the Part

Silicon Valley and global analogues have a reputation for thriving on casual – everyone is familiar with Mark Zuckerberg’s gray t-shirts. West Coast techies are outfitted in Patagonia vests, not business suits. It’s easy to forget that you will be judged on your appearance, and that first impressions matter a lot.

Research conducted by Princeton University in 2019 shows that people judge your competence based on how rich your outfit looks, a process that often takes less than a second. So even though your pitch should be valued solely on how good your idea is, and how solid your presentation goes, it won’t.

When you meet your potential investors, ensure you embody the ideal of a successful founder.

Your clothes should be well-fitting. Your accessories shouldn’t distract from your ideas, so stay away from flashy makeup and accessories. Your glasses should be flattering, not distracting. If you’re wondering how to choose eyeglasses for your face shape, you’ll look for a fit that’s both flattering and properly fitting so you won’t waste time pushing them up your sweaty nose-bridge.

4. Don’t Leave Proof of Concept Behind

It doesn’t matter if you have the best concept in the world – you need to prove it’s working. Early traction, potential customers and media buzz can all help make the case that your business is starting to click – not just in your mind, but in reality, too.

The sad fact is that many founders believe investors will be happy to fund a really excellent idea. However, just about everyone can come to the table with an incredible concept. Investors want to find a successful good idea. The more work you do to prove your concept has legs upfront, the more likely you’ll be to get that yes.

For example, if you have an app, how many downloads do you currently have? How many are you getting per week? Can you demonstrate you know where that adoption is coming from? This helps investors understand how their money will help you scale.

The good news is, many investors are still happy to hear about your incredible idea early on in your founder career. You’ll almost certainly get a no, but you can learn from that rejection and use it to help perfect your pitch moving forward.

Business presentation

5. Don’t Rely on 1,000 Words

A lot of founders can get caught up in describing, analyzing, and discussing their product or idea. Instead, show a demo. This ebay of showcasing of your concept or product will accomplish a lot of things in much less time than slides.

First, it’ll prove your concept works. Second, it gives potential investors a much better feel for what your product can help customers do, which will convey a greater sense of value. Finally, it can prove you work well under pressure, as many investors will know from their own experience that live demos often go wrong – and you’ll have the opportunity to show how you cope with challenges.

If you want to minimize your chances of things going wrong, you can check out examples online of how to mitigate disaster-case scenarios during product demos, such as this toolkit from MaRS, a Canada-based investor resource hub.

Final Thoughts on Nailing the Meeting

A successful meeting with investors is more than just about conveying your amazing idea to them. All meetings will have an outcome you can learn from, whether a rejection that helps you improve, or a yes that gives you the funding to help grow your product.

By avoiding these mistakes, you’ll have the best chance of having a great meeting with a potential investor, and getting the answer your want.

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