If you have spent many a sleepless night conceptualising the idea for your start-up, developing it into a product and perfecting it, congratulations! You have just completed the first phase of your journey as an entrepreneur. It is now time to rope in investors into backing your dream and turn it into a reality.
This is where a pitch deck gains relevance. By giving potential investors insights into your plan, your product and your future vision with a couple of PowerPoint slides, a pitch deck can convince them that your product and business is worth investing in and help you seal the deal. However, while creating an investor pitch deck, care must be taken to ensure that you don’t make the following mistakes while presenting your ideas to investors:
Too little, too less
To invest into a venture, an investor needs to a fair amount of knowledge about the company, the product and the team associated with it. If the information given is deemed inadequate, a potential investor might choose to err at the side of caution and pull out from the funding drive. Giving out enough information therefore becomes necessary for start-ups to secure their investments.
Too much information, literally
While giving adequate information about the start-up to potential investors is something that should be aspired for, there can often be instances where entrepreneurs tend to overcompensate and give out too much information all at once with verbose text and multiple slides. This information overload can put off potential investors. As such, you must take care to ensure that each slide is concise and talks precisely about the objectives in hand. Using pie charts and graphs to represent textual information in easy-to-decipher pictorial form can also help in keeping the pitch crisp and to the point but make sure you don’t overdo it.
The Great Unbalancing Act
It is crucial to have a well-balanced team in order to sustain any company. In start-ups, which generally operate on lean teams and shoestring budgets, it becomes even more vital to find the right balance of talent. Investors often invest as much in the team as they do in the idea. However, many a time, entrepreneurs bring in too many individuals on an advisory or freelance role instead of building a proper team. While this dependence on advisors may help start-ups save money in the short run, it can also put investors off by giving an impression of instability and potentially undo the good work done by the venture.
Counting your chickens before they hatch
Imagine a scenario where you’re in talks with a set of investors and are quite confident in securing investments from them. Because it is almost a done deal, you add these names in your next pitch to different investors to add more weight to your proposal. But if you think this is a sound idea, think again. The investment community is a tightly-knit community in which news travels fast. Putting in names before you’ve signed the dotted line not only hits your credibility with future investors, but might also strain your relationships with the existing ones. And let us not even talk about the PR disaster that might ensue should these ‘sure-shot’ investors pull out at the last moment.
A similar approach must be followed while representing team strength. Only talk about people you have on board instead of boasting about those that can potentially join you. This could end up undermining your investment pitch instead of strengthening it.
Overselling aggressive expansion plans
Aiming to achieve your business goals is good but overselling that aim to the investor might lead to challenges later on in your growth journey. While you may have a business idea that may evolve with time into many independent business verticals, whenever pitching your idea’s future, you must break the long term mission into smaller, more achievable short-term goals. This will help in setting more realistic expectations with the investor and can help you in securing the funds you need.
Lack of a focussed approach
Do not try to impress your investors with a pitch deck that promises more alacrity than action. It is good to have realistic goals which you are confident of achieving within pre-meditated timelines. Overcrowding your growth plans with tangential targets that may lack relevance to your actual business, will mean spreading yourself thin on the credibility margins. Offering too many ideas in one go might give the impression of an uncertain approach to the investors, who may then hold back funds.
Making misleading or false claims
As an entrepreneur, you must always be honest and precise with the information you present, especially to the investors. While inflating the numbers a little or presenting them in a different light might appeal to you when trying to secure a much-needed investment, this can also put investors off from funding your venture and can also damage your credibility as an entrepreneur. Therefore, adequate care must be taken to ensure that all numbers, facts and data incorporated in your pitch must not be false or misleading.
Not showing enough commitment as founder
Being a founder is a great responsibility which requires you to be passionate about your venture and be committed to all aspects of its business. This must also reflect through in your investment pitch. Having a passive pitch might create a negative impression in the minds of the investors and decrease your chances of securing an investment.
Talking about alternate business plans
While you may think that adding information about the success of your previous business ventures might add greater impact to your investment pitch, the reality could end up being quite different. The pitch deck is created to showcase the game-plan of your start-up. Therefore, you must avoid putting in too many details of your other ventures and focus on the positives of the start-up you’re pitching to the investors.
A lack of ambition
Investors need to see quality as well as ambition in your plans. Showing bleak or no plans for future expansion can be interpreted as a lack of ambition. It is therefore important to chart out an elaborate growth plan for at least a couple of years down the line. This will depict the stability of your business and a desire to grow as an organisation.