date: 2021-06-14 11:36:01
As you may have heard almost 90% of startups fail. As sad as it may sound, if you are not able to secure your funding eventually, you could be looking at joining these 90%. An important part of securing your outside funding is your pitch deck.
Worry not though, the fact that you’re trying to understand the mistakes, means you are more likely than not able to encounter them. As Albert Einstein once said “If I had an hour to solve a problem, I’d spend 55 minutes thinking about the problem and five minutes thinking about solutions.”
The following are the top pitch deck common mistakes usually encountered:
Unrealistic forecasts
Remember investors usually have vast experience in meeting with entrepreneurs and working with companies, which leads them to understand if your forecasts are unrealistic or not. Sometimes outlandish forecasts are correct, however, that is usually so rare that even the founders themselves would have not anticipated it, for example, Airbnb and Facebook at the beginning never thought they would reach their current level of operations.
Keeping that in mind, there is nothing more annoying for investors than seeing extremely high forecasts which do not have a good basis or evidence.
Refer to our article on 5 Methods to Make Realistic Financial Estimates for more details on how you can encounter this.
Unclear Storytelling
As once stated by a prominent investor “A problem well stated is a problem half-solved.”
All products / services, are naturally solving a problem. In that sense, one of the things you should be doing during your pitch is to clearly and simply illustrate the problem. The more specific and easily explained the higher probability the investor would agree with you. Now if you are still at the very beginning (i.e. Pre-Seed or Seed), you should be mainly focusing on one or two problems maximum, so atleast that should make your life a bit easier. After stating the problem, the size of the problem, its importance and who you are solving the problem for (i.e. your typical buyer persona) should be also stated.
Afterwards, you can begin with your solution (i.e. your product). Organizing your pitch like this would lead to clearly pitching your idea/product to investors.
Failing to answer commonly asked questions
Normally, during your pitch deck the investor would cut you off and bombard you with questions. If you had maybe 7-10 meetings already, you would start noticing that most of the questions are usually the same. If you were not prepared in answering these questions, this would most likely leave a bad impression.
So, how can you overcome this without actually attending 7-10 meetings? Pitch to your friends and family and seek their critical feedback. If you were not able to answer their questions, then it is more likely than not you will struggle with investors, who are usually more aggressive with their questions.
On a high level, usual questions pertain around your team, financials, key metrics (at least the most important ones), market opportunity, competition and how the funding will be used.
Additionally, you should always have in the back of your mind, how the investor can help you. This is because usually investors would like to not only provide funds, but also be a critical part of the decision-making process on important decisions, or maybe you may need them as an advisor. Managing expectations with investors from the beginning is very important.
Not having a professional pitch deck
Given the vast free resources available online for a professional looking pitch deck, an unprofessional looking pitch deck would simply imply to investors that you are not thorough and that not enough effort was put into the making of the pitch deck.
Accordingly, your pitch deck should look professional, organized and presentable. Also, try as much as possible (especially if you are a non-designer), to make it look as if it is your own deck, not just a template that you merely added data in.
The presentation should not be long, ideally between 12-20 slides maximum. Remember, if the investor is interested, there will always be time to discuss the business in details afterwards.
Summary
The above are only the top mistakes that founders usually face. Nevertheless, understanding and encountering them prior to your meetings will help you have a beneficial and fruitful meeting.
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