David King, a US based startup investor has seen hundreds of pitches from early stage startups.
I’ve pitched my own companies many times as an entrepreneur.
Often an entrepreneur uses certain phrases or details that make a seed stage pitch sound weak
Here’s a list of 10 things that should be avoided in seed stage pitches:
1. “We’re trying to raise $XXmm…”
Establishing a sense of confidence can go a long way. “Trying to raise” sounds like you’re not quite sure if it’s going to happen and you’re testing the waters. It sounds much better to say, “we’re putting together $XXmm to build the company/product to achieve milestone Y”. Do or do not, there is no try!
2. “Our exit strategy is…”
At the time you are pitching for seed money for a business you should not be planning an exit. (Different for property where knowing the exit could be key to getting the investment or property loan) You need to show that you’re ready for the hard slog ahead where you will be focused on creating value. Pitching the exit on the way in is a big turnoff. It sounds like thinking small and are nervous about the opportunity. Be bold!
3. “Check out the way this specific feature of the overall product is cool”
Features within the product aren’t interesting. Markets are interesting, people are interesting, products are interesting. If you have to discuss a specialized feature of your otherwise larger product you’re getting lost in the weeds.
4. “Our X technology is proprietary…”
I’ve been involved with many companies who have built really interesting technologies, but the starting point is surprisingly never a technology. The starting point for a successful startup is building a product that resonates with users or building a sales channel and brand around a product that let’s you sell it. Technology helps each get more scale and defend their position. If you need an app to launch the project, just build the app and don’t talk about it
5. “We’re going to beat Google/Facebook/Amazon by building X”
When Facebook was developing, it wasn’t claiming to be a better search engine. It was just trying to be the best social network it could be. Über may have a large impact on Amazon’s ability to control the last mile delivery but Über started as a online dispatched asset-light taxi company, not an Amazon killer.
6. “We’re like Airbnb for X”
Startups that are inventing something new should do so from first principles. What is it that you have observed that needs to be fixed? How will you build something that fixes that problem? Once you have understood the problem and built a solution it won’t look like Airbnb any longer. Über was founded the year after Airbnb, but was never pitched as Airbnb for people who drive cars.
7. “Hollywood celebrity X is investing in this round”
Nothing against celebrities but if it’s part of your pitch it’s actually a big turn-off , if you think that involvement of Hollywood celebrity X is material to my decision to invest.
8. “We’re trying to hire someone to build the app for us”
There are plenty of great entrepreneurs who may decide to outsource the development for a number of reasons, but if you aren’t “technical enough” to build it then you should be “hustler enough” to figure this out and it should not be a main point of discussion in a pitch.
9. “We have 5 founders”
While there can be rare exceptions, this is a huge red-flag and you should lead with an explanation about why it makes sense for your specific opportunity.
10. “We’re going to be co-CEOs”
The company needs a tie-breaker to move fast. I can’t think of one great company that had co-CEOs
The four most dangerous words in investing are: 'this time it's different'!
Source: The Bob Pritchard Newsletter
http://bobpritchard.com/blog/
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