Sunday, August 4, 2013

"Y" investors don't want you to pitch ??


It have observed some common mistakes that most of the entrepreneurs make. listing down some of the things that really "turn-off" most of the investors.

  •  Too much of text: Avoid text heavy presentations. Keep them short, crisp and only write what is needed. The moment you have lot of text, the person viewing the presentation starts reading the text and his mind stops listening to what your pitching. The power point slide is a tool to only show the "Power Points"

  •  Irrelevant visual elements: Some people do follow the above statement and to replace text use visual elements. But then they use irrelevant images, charts which don't really add enough content value. Add something like a flow-chart of process, image of prototype developed, etc.

  • Missing the "How" question: Most of plans often say: We target to a yearly run rate of $ 2 Cr. in second year of our operations or We shall acquire ABC number of users in coming years. Few talk of how they will reach to a yearly run rate of $  2 Cr or acquire those ABC users.
  • One could say, for an e-comm company: I plan to increase by average ticket size to $ 100 from current $ 600 and increase my orders/week to 20 from current 15, resulting in a yearly run rate of $ 2 Cr. 
  • Again, define how you would increase your ticket size and order/day. When you do this, investors get to know that you understand the key growth drivers of your business.

  • 5) No Competition: Its difficult to not have competition. Yes there might not be a true competition, but there always is possible competition. Try and show investors that you have studied each competitor (true and possible) and then designed your differentiated product. Avoid saying, "We have no competition"

  • Scary Ask and Valuation: Be realistic in terms of your financial ask and valuation. Don't ask something that is beyond a fund's focus/ticket size. Also show how the money is going to be used. Investors know how much money is needed at each stage.
  • Regarding valuation, its an pure art of brain . Don't scare an investor by putting a $5 million valuation for a company that has not made its initial revenue. An entrepreneur who has raised money, or an investor, mentor will be better to guide on valuation.

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