Youve been chasing investor leads for months, and finally youve scored the opportunity to meet with a genuine prospect. Youre half way through your pitch, and you can already tell theyre just not digging it. What now?
Anyone whos sought capital from investors will be familiar with this situation. The fact is that early-stage investing is a numbers game, and not all investors are going to like your pitch. So if you can tell early on that theyre not catching what youre throwing, what do you do?
Dont Make It Any Worse
A common mistake that founders make in this situation is to dig an even deeper hole for themselves. When they sense the investor isnt liking their pitch, theyll start saying anything they think might bring the investor back on board this often involves unrealistic promises and offers that the investor will see straight through; and only serves to reduce the credibility of the founder.
All Is Not Lost
Once youve identified the investor is not liking your pitch, you can still gain a lot from the situation if you can turn it toward getting some feedback:
Display open-mindedness: Asking for feedback will show your willingness to take on constructive criticism and work on your weaknesses, which will be considered positive traits by investors.
Identify holes: While you wont get this investor on board, the experience and feedback might allow you to identify some holes in your pitch which will make the next one much stronger.
Preserve the relationship: By trying to gain something from the situation, youre much more likely to preserve the relationship with the investor, and increase the potential for investment in the future. Being a founder is a career, and each investor meeting is an opportunity to start a life-long relationship.
Obviously your goal should be to avoid situations where your pitch isnt well received, but how?
Common Mistakes That Spoil A Pitch And How To Avoid Them
Problem: Your pitch is too long winded.
Solution: Keep in mind investors are generally very busy people who receive numerous pitches, so make yours punchy and highlight the points you think will be of most interest to them. Dont make them sit through a 30-minute presentation to hear the 3 minutes of content theyre most interested in.
Problem: Assuming they are your target audience .
Solution: While the benefits of your offering might be blindingly obvious to you, your business partners, and your target customers, that doesnt mean theyll be so obvious to investors. Often, the best way to convey benefits is by telling a story about a real person who needs your solution allowing the investor to see the world through your customers eyes will help them understand the critical need for your offering.
Problem: Unrealistic calculations of market demand.
Solution: Investors will know straight away if your calculations of demand are bloated and unrealistic. Rather than stating the total market value and the percentage youre going to capture, figure out the realistic number of customers within reach right now, and if you can, weave in the capabilities of your existing sales process to work out how many of these customers youre likely to capture.
Problem: Thinking your solution is the only one in the market.
Solution: This mindset is very dangerous and is only going to make you look naive to investors. However, if you can show them how youll exploit the competitions weaknesses and position your offering to dominate, youll have a much more plausible proposition.
Keep Your Chin Up!
The key to creating a thriving business is persistence. If you talk to the owner of any successful business, theyll be able to offer a very long list of the difficulties they faced in getting their business to the successful state its in now. Dogged persistence and the ability to improve are a surefire combination for success.
Before we close this article, here’s a video on “Create and Pitch a Successful Business Plan” with David Ronick who is a co-founder of upstartbootcamp.com, which helps founders start up smarter via on-demand courses, coaching, and webinars.
What pitching stories do you have? Have you been able to turn an investor rejection into a later success? Howd you do it? Let us know in the comments.