Investor pitch · Fundraising

What is the biggest complaint Investors have about the pitches made to them?

Cheyenne Jones CEO/Founder

April 1st, 2015

1. I'd like to know what entrepreneurs are missing when they present before potential investors of any level.
2. What is the biggest complaint entrepreneurs/founders have about the pitch experience?

LanVy Nguyen Founder & Managing Director at Fashion4Freedom

April 3rd, 2015

I am both an investor and an "investee";   We've quietly closed 59 deals in 5 years in one of the toughest markets to find good deals, Vietnam.

The biggest waste of effort for most entrepreneurs is to enter into a Pitch Competition (unless the entrepreneurs can calculate and accept that whatever may result, the competition created worthwhile marketing---OFTEN THEY DON'T).  Most would-be investors at conferences and public pitch competitions are not interested in investment of new ideas (not really); these "investors" are there to seek bigger investors for their funds. 

Entrepreneurs reading this board:  if your revenue is less than $500K usd,  it's better that you continue devoting your heart and soul into building the business rather than serving your hopes and dreams to uninterested investors.  Build a business strong enough so that YOU can control the negotiation.   Investors ask too much and do too little to help the entrepreneurs grow their businesses because they lack operational acumen.    

The rare chance that an entrepreneur finds would-be money at one of these public pitches or forums, the entrepreneur should quickly assess whether the investor can actually help grow his/her business.  At a conference, my casual conversation with a fund manager lead to  investment inquiry in my project.  Within 5 minutes of that suggestion and after 45 minutes of conversation, I graciously turned him down. He was stunned and prodded to understand my logic. I explained that his experiences and expertise, through impressive, were not suitable to help me grow. The process of due diligence, negotiation, monitoring, reporting, auditing, and all the business requirements for taking investment money would derail my own processes for growing the business.  Some money is simply NOT worth taking until one understands and accepts the trade-offs.  

Karl Schulmeisters Founder ExStreamVR

April 2nd, 2015

Here's a good list of errors made in Pitch startups

and here is a good summary of Pitch content

Most pitches that I've seen talk a lot about

  • What they are building
    • How cool it is
    • how they came up with the idea
    • how it will make things better
    • how much positive feedback they have gotten

but they often either gloss over or completely miss

  • how they will monetize their users
  • how they will market to their potential users
  • who their big compeititors are
  • how investors will exit.

in particular this last one. I've almost never heard a startup pitch get this right

Ryan Hemingway Director at EPIC Ventures

April 3rd, 2015

I think it is important to separate the ability to deliver a good pitch vs what looks like a good investment.  I often hear great pitches with polished presenters that have ideas & business models I wouldn't invest in.  On the other hand I hear bad unpolished pitches describing great problems, with fantastic solutions.  As an investor it is my job to look past the delivery to determine whats really going on and find the hidden value.

The main point I want to make is companies don't get funded because they had a great pitch and presentation.  People get funded because they found a big problem and they developed a great solution for it.  They have put together a fantastic team that can execute the plan.

With that said as far as pitches some of the more frustrating things are spending too much time/slides on macro level trends.  Entrepreneurs don't need to spend 10 min and a several slides on describing how big the mobile market is, and how quick adoption is happening.  As an investor I am pretty up to date on current macro trends (its my job to know).  
I can't speak for every investor but a few things I really want to hear are
  • Who is your target customer and what is their role?
  • What is the specific problem you are solving for target customer?
  • How is that problem getting solved today?
  • What do you do differently?
  • Why are you better than the current solution?
  • What is your value proposition to the customer in $$.  Do you help to increase revenue if so how much, or do you help to decrease expenses if so how much?  (I invest in Enterprise technology so this may not apply to consumer facing solutions)

Janice Mandel Writer, Communications Strategist, Advisor

April 2nd, 2015

A recent Investor panel stressed among the biggest pitfalls is not understanding the interests and business model of the investors or addressing competition and how you differentiate. Just wrote a blog post about this at Sent from my iPhone

Peter Kestenbaum Advisor, Investor, Mentor to Emerging firms

April 3rd, 2015

Well I read 6 plans this am...   a typical collection...   4 were from tech types that hit me with reams of technical stuff and just missed basic criteria..
- can I in either the first paragraph (if written )  or slide(s) understand what problem you are solving,  who the buyer (as opposed to user of client) is,  and what business model you have...
- What criteria ( other than I got an engineering degree from harvard ) does the founder have and what pieces of the management team does he have in place or need
- Is there a prototype, mvp, or heaven help us an attempt at revenue...

of the 4 two went even further into abiss...   they were for tools for developers who service small business...  and they proceeded to inundate me with how big the small business market it without a mention of the system integrators or suppliers who would do the buying or using of the client

Jessica Alter Entrepreneur & Advisor

April 2nd, 2015

1. I'd like to know what entrepreneurs are missing when they present before potential investors of any level.
  • Totally agree with Tim - Don't know how to tell a story is the worst. That's both a succinct story about what you're doing and your story/why you're passionate.
  • Don't show them the actual product!!
  • Get defensive = don't know how to take/respond to feedback
2. What is the biggest complaint entrepreneurs/founders have about the pitch experience?
You have to understand that when you pitch you are 150% invested and VCs are 0% invested. It's your baby, you are 1 of 8 pitches they are hearing that day. So tell your story, don't just go through slides.

David Schwartz Multi-Platform (Desktop+Mobile) Rapid Prototyping + Dev, Tool Dev

April 2nd, 2015

Regarding #1: Watch Shark Tank. Some patterns begin to emerge if you watch enough shows. I'm in a class of sorts at the moment about startups and this question has come up. Basically, investors want to see evidence of "Product Market Fit", namely some decent level of sales to parties other than friends and family. If it's a website of some sort, they want to see 10k-20k monthly unique visitors.

I cannot comment on #2.

Peter Kestenbaum Advisor, Investor, Mentor to Emerging firms

April 3rd, 2015

good comments Julien... with one caveat... Most investors are not pitch deaf... they are deaf to investments that are not of interest to them or are understandable.. Its a question of who needs whom... As an entrepreneur to preach that the investment community does not understand what I am selling them... they are the buyers.. they are your clients.. if they are not buying what you are selling you have no business.. Kind of like Ford telling the world, the consumer does not appreciate all the advanced design that went into the Edsel...

Nima Aghaeepour

April 1st, 2015

For your first question: Amir Ashkenazi has a slide deck on his public LinkedIn profile titled "The Ins and Outs of Lunching a Startup". I love slide #26 ;)

Laurelle Johnson, MBA

April 2nd, 2015

Check out Guy Kawasaki's "Art of the Pitch"  He is an investor and his 10/20/30 rule is great guide for pitch deck.  He is on youtube, so you can see easily what investors tend to look for.