Home » Mistakes of the Startup Owner in the Investor’s Estimation
Let’s suppose you are a student dreaming of becoming a successful businessperson. And you’ve got a wonderful business idea you think to be able to change the world. Then, you checked writepaperfor.me reviews and asked worthy pros for online help with assignments. You used the additional free time to process the idea and gather your first team to make it become a bit more real. Finally, your concept got shaped and polished enough to do the next step. When your idea is ready to find its investor, it may seem that all troubles are already behind.
However, investors think differently. Here below, you’ll find a list of mistakes able to bury even the brightest business concept. Investors don’t like when you behave like that. Keep those failures in mind when planning your presentation, and your chances to get the money required for your startup to grow will increase.
Mistake 1: No Prior Agreement
To make sure your plan actually has a chance to reach a potential investor, it is better to send it via the intermediate link working in that person’s structure: a top-manager of a company in their portfolio, a venture foundation worker, a lawyer, etc. They will forward an email to the required person. The point is, most investors throw unexpected or unknown emails to a virtual trash can at once. Keep in mind that they receive hundreds or even thousands of likely messages. They won’t spend their time finding a diamond in a mud world.
Mistake 2: Wrong Investor
There are investors giving funds only to IT-programming startups. Others prefer mobile apps. Or engineering. Or biological research initiatives. Or websites answering the questions like “is EduBirdie legit?”. Or anything specialized and niche-oriented. Before sending any emails, you should find some trustworthy information touching the investor’s preferences and current priorities. Offering them a project without knowing their priority investment fields is suicide.
Mistake 3: 70 Pages of Business Plans
Here is what you should know almost surely: investors don’t have time and wish to study your detailed business plans with all the graphs, attachments, and other supportive materials you’ve got. The proper limit is 2-3 pages. Those are enough to present a resume.
In case you’ve got a Power Point presentation, please, don’t make it overloaded with slides, images, and texts. The recommended size is not more than 20 slides containing that “squeezed” key info about your project.
Mistake 4: Telling Your Niche Has No Competitors
A story about your future business having no competitors will at least show you are not competent. The reality is different, and you should keep this in mind to avoid making an impression of a naïve person willing to get easy money. There always is competition in business. It can be direct or indirect. Or the other company can offer alternative solutions. Your competition analysis will be the mark of your market awareness for the investor.
Mistake 5: Too Modest or Overconfident Predictions
Be careful to show a company reaching $4 million of income in five years. Most probably, it won’t interest your potential investors too much. They want to invest in a company able to grow and involve clients: that’s the way for it to bring money.
On the other hand, if you think your project will reach $700 million turnover in three years, your investor will most probably find that prognosis too optimistic to be true, especially if your business hasn’t generated any significant income yet. Fantastic and brave predictions that will be extremely challenging for you to make real should better be avoided during a presentation.
Mistake 6: Unrealistic Company Evaluation Prognoses
Your meeting with a potential investor will most probably be short after you say that your company’s estimated value reaches $100 million despite it’s only two weeks old. The best solution is to skip this topic during the first conversation entirely. It will be much more spectacular to mention you’re expecting fair evaluation after.
Mistake 7: Ignoring Minor Details
Your presentation should not contain inconveniences or typos. Make a pitch be interesting and easy to perceive visually. A small tip: try to number every slide. That’s how you can make references quickly and easily. Keep copyrights protected and have appropriate notifications in the content obligatory.
Mistake 8: No Prototype
A functioning demo prototype worth ten thousand words you might say during a presentation. Let the investor see a demo of your product, site, or application, and they’ll be aware of the idea at once. That’ll work as a huge plus for your team. Oh, and it is better to polish that prototype perfectly to make it work smoothly.
Mistake 9: No Marketing Strategy
The fact that you find your project great and promising does not mean anything. It hasn’t received user acceptance or good sales so far. For an investor, it’s just an idea. So, they will reasonably be interested in your plans in this field.
How do you plan to sell your products or services? How will you enter the market? What are your plans to get potential customers effectively and affordably? What social media will be in your focus?
These and many other points will be critical for your potential investors. So, it is important to find enough time to think over your pitch. If you are a student, checking this bestessay review will come in handy. In case you’ve got a full-time job you don’t want to quit, then prepare to double your working hours when launching a startup.
Growing it won’t be easy. But the result will be worth all the efforts for sure. Never give up if you really believe in your idea. Have good luck, and let your startup prosper!