Here at EVC Ventures we intend to find the best early stage startups and help them on the way to becoming unicorns. Good advice is a part of that mission.
There are unfortunately too many inexperienced startup founders, inviting themselves to pitch without basic clarification of what makes a good investor pitch and what are the pitfalls they should avoid.
Here come some lines which you should never say to an investor during your initial pitch or a request to meet.
“Happy to meet any time you are available.”
Saying things like – “I am ready to meet anytime,” just signals that you have nothing else to do, that you are not busy making customers happy. Why would any investor pay attention in this case?
“We need between X and Y amount”
Saying something like – we need between X and Y dollars tells an investor that you have no idea what does it take to reach to the next real milestone and that you still haven’t exactly figured out what works so that you put more funds into it.
“We are already raising and we shall close a round within the next 90 days”
Nothing takes 90 days to happen especially not investing in a worthy startup. If it takes 90 days that means that there is no real interest. Oversubscribed startups get deals closed closed within couple days at the most a week before others come and grab the chance.
“Let’s jump on a quick call”
Investors are very busy people. Busier than you. Therefore don’t say or write things like – “Let’s jump on a quick call.” If you were lucky enough to have that email read, use the chance to immediately distil your pitch into two short sentences. If you can’t find a time to do that why would you expect the investor to find time to hop on a call with you?
“I only need x-dollars to conclude Y-number of transactions and turn profitable”
Those days when investors invested in traction is over. Nowadays investors prefer actual businesses and that means revenues coming in no matter the amount. Don’t ask for X-dollars in order to emerge profitable after Y-number of transactions. Instead emerge profitable with whatsoever traction you can.
“But even Uber started this way…”
There is only one Uber and only a particular set of investors who invest in Uber-like business models. You will not to be able to reach out to them at your stage. The Uber that you see today was definitely the same Uber during its early days in terms of business strategy.
“This is an opportunity you better not miss.”
If you try to rationalize the investor’s decision yourself it shows a clear signal that the opportunity is not worth it. Great startup founders talk business and skip the pleasantries quickly. Let the investor herself deal with FOMO.
“This industry is a x-dollars one and I plan to take Y percents of it.”
No investor ever invests in a startup that dreams of capturing a miniscule part of a larger industry. If you knew how venture investing works you would’ve known that for an investor to consider a lucrative opportunity, it has to have a potential of minimum 50-100x returns. Your dream of taking breadcrumbs out of the pie is unlikely to achieve that goal for him. Investors invest in companies whose objective is to be the largest company in their specific vertical.