For any startup trying to find investors, one of the best ways to go about it is putting yourself in the shoes of the investors. How?
Similar to how we get to know our customers, we also have to know our potential investors’ desires and fears. Think about what they’d look for in a perfect investment.
With experience and insights coming from countless investor pitches, here’s a rundown on the 3 MISTAKES you should avoid when trying to raise investments:
MISTAKE #1: BEING IN A HURRY
When looking for investors, first impressions do matter - especially when you’ll ask them to support your vision with their resources. So having a product that’s 20-30% done just won’t do. This gives your potential investors plenty of room to doubt if this will even push through.
Give them confidence that you have a solid plan, with timelines and initiatives to get your tech fully developed, and ready for the market.
Don’t come into a pitch without a prototype and demo ready!
MISTAKE #2: NOT UNDERSTANDING THE PSYCHE OF THE INVESTOR
It may seem a bit basic, but you’d be surprised as to how many startups forget to “put the investors’ shoes on”, and it really shows when pitch day arrives.
Once we tie those laces, we realize they operate on 2 things:
1. The Aspiration to make profit from the investment
2. The Fear of losing money
Most seasoned investors have lost money at one point, so it’s best to never underestimate the measures they’ve put up to make sure that doesn’t happen again. These measures come in the form of detailed criteria to minimize losses and allocate their money where there’s the highest chance of earning profit. And nothing says “profitable” more than a startup with:
1. A working prototype
2. Some traction in the market
3. Partnerships and alliances
By learning their criteria and preparing for it, you’ll be on your way to a rejection-proof investment pitch!
MISTAKE #3: THE LACK OF CONFIDENCE AND ACCOUNTABILITY
If an investor asks “When will your product be ready?” what would you say?
*MENTOR’S TIP: Never answer, “It depends on the tech”, or “It depends on when the developer will finish.”
One of the things investors really don’t like is the LACK OF ACCOUNTABILITY. When speaking with them, make sure there’s a concrete plan. Ofcourse, we don’t want to overcommit. But not being able to confidently answer these questions is a sure sign that there’s more preparation to be done.
Show your investors that you’re a MAKE IT HAPPEN entrepreneur and not just someone who waits for things to happen. Remember, to get someone to invest in you, you have to show that you’re investing in yourself and your vision, too.