There’s no magic formula for winning over venture capitalist or business angel, but we do have one for losing them. The secret is to craft an investor-repellent pitch deck. Your pitch deck, a short presentation introducing your company, serves as investors’ first glimpse into your business. Scare them at this stage, and you’re sure to never hear from them again.
Need help? Here are ten tips to craft a terrifying pitch deck.
#1 Use as much industry jargon as possible
Show off your industry knowledge by using as many specialist terms as possible. Like everyone else, investors are afraid of what they don’t understand. Explaining your concept and technology in simple language will make them like you. To scare them, show off your industry expertise with specialist terms and convoluted language. The prospect of injecting capital into a business that only you understand will have them deleting your email within seconds, guaranteed.
#2 Leave out any information about your team
A strong team is perhaps the single most important factor in investors’ assessment of your business. They’re looking for evidence of industry knowledge, entrepreneurial experience, and leadership skills. Leaving out this pertinent information is a sure way to unsettle them. If not talking about your team at all sounds too extreme to you, telling a heart-wrenching story about the founder without any mention of his or her qualifications to run the business is another valid scare tactic.
#3 Inflate your numbers – no explanation needed
While some entrepreneurs settle on the highest valuation possible to impress to investors, this strategy is better suited for turning them off completely. Investors are used to dealing with large numbers, but what will alarm them is a lack of research to back those numbers up.
#4 Identify your target market as ‘everyone’
This is another excellent tactic meant to invite investors to send your pitch to the rubbish bin. Investors know that no product or service appeals to every person on Earth and that it’s impossible to market to ‘everyone’. The fact that you seem not know this will unsettle them greatly. No investor makes a deal with an entrepreneur who refuses to do market research.
#5 Don’t mention your competitors
‘We have no competition. Our product is the first of its kind.’ At first glance, this makes your company seem attractive, so keep it that way. It doesn’t matter that investors feel otherwise. Their experience has taught them that even the most innovative companies have competition. Consumers always have an alternative to your product or service. To keep investors away, don’t let them know you know this.
#6 Be vague about your business model
Leave this slide out of your deck completely. Investors cringe at a pitch that insists a product or service will make money ‘because it’s such a great idea’. They’ll probably be too disturbed to explain to you that no idea is guaranteed to make money and that it’s the entrepreneurs job to find a way to make that happen.
#7 Don’t mention EIS/SEIS
Investors often expect your business to qualify for one of these tax relief schemes. Make them uneasy by not mentioning the terms anywhere in your pitch. To heighten the effect, say that you’ve never heard of them.
#8 Leave out the costs
Endearing yourself to investors would require you to give a clear breakdown of the costs of running your business. But scaring them? This requires leaving them with no idea how much money you truly need from them or how their money will be spent. Then, an even scarier thought will occur to them: perhaps you, the entrepreneur, don’t know your costs, either!
#9 Mention no one who has shown an interest in your business
Previous investors? Early adopters? Social media followers? You investing your own funds? These make potential investors feel safe. The more they see of these, the more they feel that they won’t be alone in supporting your business, that taking a chance on it won’t be a huge mistake. Don’t give them this comfort.
#10 Use text only
Presenting facts about your company using graphics only makes it easier to understand and therefore more appealing, which is not what you want. Go for a more intimidating design that features walls of text, requiring the investor to set aside at least an hour or two to read and digest. This is the most important tip of all, given that investors have no more than a few minutes to look at each of the countless number of decks they receive.
There you have it. Commit even some of the entrepreneurial sins on this list, and you’ll strike fear in the heart of every investor who sees your pitch deck.
On the other hand, if you want to convince funders that your business is investment-ready and secure coveted face-to-face meetings with them, consider doing the complete opposite.
Do you own a small or mid-sized business? Are you looking for funding? The Business Funding Show will bring a range of traditional and alternative funders together under one roof in one day to meet you and help you discover your ideal funding solutions and how you can secure them.
The only funding expo in the UK and EU, the flagship Business Funding show will take place on 22nd February 2018 and feature leading industry bodies such as London Stock Exchange, UKBAA, BVCA and British Business Bank; equity investment platforms SyndicateRoom, Crowdcube and Crowd For Angels; venture capital firms Atomico, Calculus Capital, Cocoon Networks and Edge Investments; business service providers A City Law Firm and RIFT R&D Tax Credits; and many more!
More details and tickets are available at https://www.bfsexpo.com/.