The Seven Deadly Sins of Investor Presentations
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The Seven Deadly Sins of Investor Presentations<br>In this short video, you'll learn the seven most common mistakes that entrepreneurs make when presenting their business plan to angel investors. If you avoid these mistakes, you'll greatly increase your chances of getting you company funded.
<style> .stage h3, .stage h4 {color: white} </style> <h3>The Seven Deadly Sins of Investor Presentations</h3> <h4>by Byran Brewer</h4>
I'm Bryan Brewer of <a href="http://www.bizplansnw.com/">Business Plans Northwest</a>. In this short video I'm going to tell you about the seven most common mistakes that entrepreneurs make when presenting their business plans to angel investors.
I've seen hundreds of pitches here in Seattle area Northwest whether through screening committees or through angel investment forums or business plan competitions. And in my experience these are the most common mistakes.
Now it's not just my opinion. These are the same mistakes that angel investors tell me that they see over and over again. Now the good news is, if you take this advice to heart and you fix these mistakes you will have a real competitive edge over other entrepreneurs who are raising money.
So, let's go over each of these seven deadly sins of investor pitches.
"Obfuscation" is the sin of not clearly explaining what your business does. This is by far the most common complaint I hear from investors. Now it's understandable, as an entrepreneur you may be so close to your business that you're not aware of the jargon that you use or the assumptions you have about your audience. But it's really important to make your business clear and simple and understandable. Really, easy enough so your grandmother can understand what your business does.
Way to get help with this is to get feedback from the people who are not familiar with your business industry and keep honing the pitch until it's clear and simple for them. By the way, one area of your pitch to help focus here is on the problem and solution area. If you can be very clear about what problem you are trying to solve and how your company solves it, that's half the battle.
"Verbosity" refers not to talking but to too many words on your slides. Your slides are there to support your talk, not meant to convey details. You don't want your audience reading your slides, you want them listening to your talk. So it's real simple just use fewer words and use more graphics where appropriate.
"Inaccuracy": So I have to tell you that I am sometimes appalled when I am sitting there, watching entrepreneur's pitch to investors seeking to raise hundreds of thousands of dollars and there are typos, misspellings, or other mistakes in the slides. They all distract from the total effectiveness of your message.
And there's another type of inaccuracy that shows up a lot. When an entrepreneur has a valuation for example of three million dollars listed on the slide and then the investor looks at the one-page executive summary and it's a different number say two million. That raises a lot of doubt and confusion in the investor's mind. It's really simple, just double check the details from all your materials - your talk, your slides and your printed materials.
So those first three sins, obfuscation, verbosity and inaccuracy are easily correctable. It's just basic communication 101. And if you avoid those mistakes you will easily be in the top half of presenters.
"Laziness": Now the next two sins are a little more subtle and actually made require a change in attitude in order to avoid. The key question here is have you taken the time to practice your pitch. Because if you haven't, it really shows. And I'm not talking about practicing just once or twice, but dozens of times over which you can hone your delivery and be natural and confident the way you come across. It's just being a professional. And here's a tip - when you do practice, make a video recording of the sessions and review them and learn from that to improve your pitch.
The sin of "arrogance" appears in the question and answer period of your pitch. Getting defensive to any questions of criticisms is one of the quickest deal killers around. You have to remember - angels are thinking neither about investing money in the business but investing time and effort in a relationship with you. If you get defensive, it's a sign that they may not want to deal with you. It's just human nature. So develop an attitude of showing interest and respect from the questions. And learn to practice a little hearing.
So I hope you understand how those previous two sins, laziness and arrogance, may actually require a change in attitude in order to avoid.
Now the final two sins are about two very important aspects of your investment opportunity - timing and money.
"Impatience": Raising money too early can be a problem. Angels prefer to invest in companies where the product development risks have already been lowered. Only a small portion of companies with just an idea or prototype actually get angel funding. Use the money from friends and family and your own resources to develop the product or service first and <em>then</em> seek angel money to go to market. If you develop your product first, you'll get a higher valuation for your business.
"Delusion": <em>But</em> if your valuation is too high, if you're not tuned in to the current market for angel investments, then you have also got a problem. You won't be competitive either. It's important to understand that typically about twenty to thirty five percent of the post-money valuation is represented by an angel round. If you are over price, you simply won't get funding. The way to solve this is to get advice from the people know and those people are attorneys see these deal flows and help you set a realistic valuation for your company.
So thanks for listening. I hope this helps. And there's one final thing I want to leave you with. Every once in awhile I hear investor pitch where the story is clear and compelling and the entrepreneur's delivery is smooth and confident, and the deal is just right in terms of the timing and money. Everyone is sitting there in the room, absorbing the message, and in the end of the pitch, the room falls silent. It's a magical moment when you can hear a pin drop. In fact, I can almost hear the sound of the investors reaching for their checkbooks. If you put in the time and effort to avoid these seven deadly sins in your investor pitch, you may be fortunate enough to experience one of those magical moment yourself.
So get out there and pitch with confidence!

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