Investor Presentation Mistake: Trying to Educate Them During the Pitch
One of the most common mistakes entrepreneurs make when presenting to potential investors is trying to educate them.
One of the most common mistakes entrepreneurs make when presenting to potential investors is trying to educate them. By educating I mean including in the presentation too much information about the project, business, or products, and trying to convey all of it within a very short time, typically 4 to 5 minutes during a regular pitch.
I witness this all the time both as a presentation trainer, but more importantly as a startup investor myself. And when that happens, I ask the entrepreneurs why they wanted to include everything in the pitch. They usually tell me that they think the investors could make a better-informed decision to invest in the company if they had a total understanding of the product or service.
And this is where it becomes very critical to correctly identify the goal of the 4 to 5 minute investment pitch; it is not to have the potential investors to grasp everything about your company or project and flash their checkbooks at the end of your pitch to sign the deal. No, the goal of a short investment pitch is actually to get the potential investors to become interested enough in you, your project, or your company to just want to move forward to the next step with you. This could be another meeting with them with more partners or decision-makers present, a private meeting to discuss more details, or something else.
Think of your investor pitch like a first date. The goal of the first date is not to get the other person to decide to marry you by the end of the date right? No, if you did that, the chances are that the date would go horribly wrong, and the other person would probably think of you as weird and creepy (just remember what happened to Ted Mosby on his first date with Robin). No, the goal of the first date would be to generate enough interest — and a bit of curiosity of course — in the other person to want to move to the next step, Which is a second date. And then a third date, before getting into a longer-term relationship.
In the same sense, the goal of the investor pitch is to generate enough interest, and a bit of curiosity of course (and now you can see I am a huge fan of that). Enough interest so that the investors will want to move to the next step with you. And you do not do that by bombarding them with complicated data, a mountain of information, or complex charts. No, trust me at best they will disconnect from you, or in the worst case, they will wish that you were not talking to them in the first place. None of those are good outcomes for starting a long-term business relationship with them.
So in your next pitch, leave behind your complicated slides and never-ending, lengthy statements. Identify and convey the problem you’re bringing a solution to in very simple terms. Create an appetite to keep the conversation going by showing how your project or business presents an opportunity in your target market and why it would be in their interest to consider investing in you. I will be talking about how to do those in more detail in other videos. But for the moment, rather than trying to educate your investors, keep things simple, and make it easy to understand.