10 Dumb Things Entrepreneurs Say to Investors
1. We can share our deck and financials under NDA.
(investors don’t sign NDA’s, asking them to do so shows you have no clue what you’re doing)
2. We don’t have any competitors.
(yes you do)
3. We are raising money to build and test our MVP.
(investors invest in product and traction, not in ideas)
4. We don’t have a team, it’s basically just me, but when you invest I’ll find and hire the team.
(investors want to see a core team in place before risking their capital because all the risk is in good execution and that requires the right team from the start)
5. We are pre-revenue and don’t have any pre-orders or LOI’s, but everyone we talk to LOVES the idea.
(if everyone loves the idea then someone should be willing to pay you for it subject to delivery according to spec)
6. We are raising money for salaries so we can quit our day jobs and devote ourselves full time to the idea.
(investors don’t need employees, they need entrepreneurs who believe in their ideas enough to be already fully committed to them and are well on the way to executing on them)
7. The market is HUGE, there is a MASSIVE pent-up demand. Literally, every one will buy this product.
(in other words, you have no idea of the market size, the serviceable market, or the target market)
8. We’re like Google and Twitter, we’ll figure out how to make money after we get millions of users. It’s all about eyeballs!
(no, it’s about making money from day one, not wishing for people to beat a path to your door, or becoming a unicorn)
9. Our primary go-to-market strategy is social media.
(marketing is not sales and social media marketing is but one component of a viable go-to-market strategy that produces and tracks sales)
10. We’re raising $1M at a $10M valuation.
(no investor is looking to risk their capital in the most riskiest of all asset classes for a 10% stake, notwithstanding the fact your valuation is probably insanely rich and can’t be supported with business fundamentals)
GET SMART before engaging with investors. Join an accelerator. Get a good advisor. If you want to be taken seriously, don’t say dumb things or make rookie mistakes. You are only going to get one good shot at enticing investors to look at your deal. Time is money, after all.
Good luck! Join us at https://www.startupbiz.com for best practices, investor pitch prep and introductions.