So, you have a great idea for a business. Maybe it’s something that will revolutionise the industry you’re targeting, or something that will change the lives of consumers forever. Or maybe it’s something simpler.
Regardless of the scale of your proposed business, it’s likely that you’re going to need funding to get your company off the ground. But with so many new ventures popping up every day, it can be difficult to make your voice heard over the noise.
The most tried and true way of getting noticed is to put together a pitch deck for potential investors that demonstrates the strengths and strategies of your business. But while this can seem like a straightforward process, there are countless pitfalls into which an inexperienced entrepreneur can fall.
While it can be tempting to oversell your capabilities, putting together an effective pitch deck is more about offering an accurate, honest, and informed picture of your business. Below are six common pitch deck mistakes and how they can be avoided.
1) Solving too many problems
Many budding business owners will fall into the trap of presenting their new venture as the solution to a whole host of problems, believing it will demonstrate their company’s ambition, or show how they’ll be able to cater to a varied range of customers.
While it can be a good idea to diversify your offerings to cater to a broader customer base, claiming to have a solution to too many problems can make your start-up seem unfocused, and will likely have investors questioning whether you really know the purpose of your business.
When seeking funding it’s better to demonstrate how your company is able to be an effective solution for a single, relatable problem. Remember the wisdom of American inventor Charles Kettering, who said:
A problem well stated is a problem half-solved
Investors want to see that you can efficiently define the problem you’ve identified, and that you have a clear vision as to how your business will solve it.
2) Pitching the product, not the business
When you have an exciting new product to pitch, it’s easy to get caught up describing all of its innovative features and design elements. But investors don’t care about the minute technical details, what they really want to know is how those details will translate into positive outcomes for your customers, and for them.
The investment community has distilled this concept down to four words:
Features tell, benefits sell
Meaning that if you want to make sales, or in this case secure investment, instead of just listing your product’s specs, you have to explain how these individual features will combine to benefit your customers.
The most frequently cited example of how is can be done is the way in which Apple marketed the capabilities of the iPod. Instead of lauding its 1 GB storage capacity, Apple told consumers and investors that the iPod would allow people to carry more than 1,000 songs in their pocket. A much more relatable benefit.
Similarly, you need to show how your business model is going to offer benefits to your investors. It’s not enough just to have a great idea or an innovative product. Investors are interested in seeing a road map to a sustainable, profitable business that will offer attractive, long-term returns.
3) Claiming you have no competitors
Many first-time entrepreneurs will fail to adequately address the companies with which they’ll be competing for market share. To investors, this can suggest that you’re either arrogant or naïve, neither of which is an attractive trait in a business partner.
There is nothing new under the sun
A phrase that remains as true as ever. If your idea is good, expect that somebody else has already thought of it and is making money from it. But that’s ok. Your goal shouldn’t be to be the only player on the market, but to offer the best product or service.
Instead of omitting all mention of your competitors, accurately assessing the strengths and weaknesses of the other players in your market will show investors that you know your business and understand the market you’re seeking to enter.
4) Cluttered, long-winded presentation
While it’s true that content is king when it comes to creating an effective pitch deck, you shouldn’t overlook the importance of how you present your information.
Investors are busy people, and they’ll want you to get to the point as quickly as possible. You don’t need to show all your working to get funding, just explain the most relevant facts and figures clearly and efficiently, and be prepared with answers to any follow-up questions.
Keep in mind that less can often be more. A well-refined, punchy presentation is more likely to generate interest than one that drags on for slide after slide of text.
5) Using tired business clichés
Too often in business communications the core message gets lost in a flood of buzzwords and corporate terminology.
These words are meant to convey a sense of confidence and sophistication, but investors have heard them all before and know what your jargon is really for: to disguise your company’s lack of clarity.
These business clichés include common pitch phrases like “we have no competition” and “we’ll be profitable in one year”. You should be wary of making bold claims like these, which are often easily disprovable and serve only to arouse suspicion among investors, and a sense that you’ve failed to properly research your market.
Put simply, if you try to hide behind business speak, you’ll eventually be found out. When it comes to pitching a business, honesty really is the best policy. Be clear, concise, and open with your information and things will work out better for you in the long-run.
6) Cut and paste presentations
It can be easy to forget that, like your customers, investors are all different, and what is appropriate for one may not suit the needs of another.
While it’s far simpler to just deliver the same pitch regardless of your audience, you’ll get more success if you tailor your pitch to suit the preferences of individual investors.
Get to know your audience before you finalise your pitch and make sure your presentation answers the questions they will want answered. If you can demonstrate that you’ve considered the needs of the investors you’re meeting and have thought about how your business might fit into their portfolio, you’ll be giving yourself a great head start.