Toptal Finance Expert and fundraising expert Jeffrey Fidelman compiled a list of the five most common pitch deck errors he observes the most frequently. With these standard errors, Fidelman highlights the best methods and teaches you how to create a flawless pitch deck.
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Inability to anticipate the need for feedback or questions
A potential investor will not listen to your pitch deck and not have concerns or feedback. If you’re not prepared to address the most critical questions your pitch deck asks, it will not make you a good fit with potential investors.
The practice is crucial. You should test your pitch deck in the presence of your colleagues, peers, family, and friends and get their feedback. If you’re unable to respond to the questions they ask you on the spot, you’re likely to have trouble answering similar questions before an investment banker. Remember that investors need to see that you are thinking about your options; they will not want a delayed or delayed response.
If investors ask you questions, they will likely be interested in the subject. Possible questions you can anticipate receiving from the investor could include questions regarding your team or management and concerns about the market opportunities as well as financials and other vital metrics such as risks, market, how the money of investors is used in the future, intellectual property rights, and so on.
Even simple questions can frighten your mind if you’re not prepared for these types of questions. Penny Lee, a senior consultant at the firm of public affairs Venn Strategies and a member of the K Street Capital angel group, explained the situation when her team asked, “How can we be helpful to you?” Many entrepreneurs are left in a blank space.
Giving unrealistic projections
Another aspect is that extensive research will yield dividends in the longer term. Investors do not want extreme and unrealistic assessments that forecast the value of a multi-million dollar project within three years.
Nothing is more frustrating to an investor than seeing multi-million dollar figures thrown around that aren’t backed by evidence.
It is also essential to be aware of all aspects that may impact your financial results in the future. For instance, it might be wise to note down any identifiable risks and competition on the market (both present and expected) to offer investors more accurate forecasts.
After the day, when you project high-end numbers, you’ll have to prove your claims with proof.
Inability to relate a story
You must sell your product, but do it clearly and rationally. The simplest way to do this is to recognize the problem. The way to do this is to identify a problem. American scientist Charles Kettering once aptly said, “A problem well stated is a problem half-solved.”
One of the most important things you need to be doing is to pitch your problem to investors and not offer a solution. The problem should be specific to get the investor to accept that it’s, in fact, a problem. Also, do not try to solve multiple problems at the same time. Be specific about the issue’s magnitude, why it is crucial, and for whom you’re solving the case.
When the issue is identified Once you have identified the case, you can present your solution.
Pitching your business in these terms will help you distill your business plan down to its essentials, which will help you clearly and effectively make your pitch to investors.
Not doing your homework
The importance of completing your homework is not overemphasized. Your strategy for reading must be comprehensive. It is not enough to rely on the possibility that you’ve got a fantastic idea for your business, a talented team, a solid structure, and growth potential. It will eventually not be worthwhile if you invest time, money, and energy to deliver your pitch deck to a non-interested investor.
First of all, it is essential not to pitch to investors unless it’s evident that the company is operating in an area in which he wants to invest. The Washington Post also quoted a partner from Washington who works for the world’s most prominent venture capital company. Entrepreneurs should be wise to investigate the nature and magnitude of investments the company and investor have made. For more information, please read our guide to what investors look for in a Startup.
Sending an executive summary or business plan unannounced to potential investors is usually unacceptable. Investors are bombarded with numerous letters every day. Finding someone of high quality (for instance, an attorney or investor) to recommend your work will probably get you more in the market than going by yourself.
Do not have a professional pitch deck
Your pitch deck’s presentation has to appear professional. It shouldn’t seem like a novice designed it. Presenting a professional, well-crafted layout, well-organized information, well-designed transitions, and a way to show graphs or charts is essential. The presentation must not appear like you’ve plugged the data into an existing template. Create your personal.
Slides for presentations must not be heavy on text. In this sense, the rule is that less is always more. The display shouldn’t be excessively long and should generally be no more than 15 slides. If the business attracts investors, there is always an opportunity and time to give them more details.
There are many templates available online for pitch decks, such as the one of Mint.com, a startup that was later sold to Intuit for $170 million. You can also download the Google template and Facebook’s first pitch deck, released in 2004. We’ve also put together various suggestions from our community here for writing pitch decks. The Expert’s Corner pitch deck tips for fundraising success.
If you have to, consider hiring a professional. This may cost you money right now (perhaps $300-500); however, it’ll be a minor sum in the scheme of things should it get you the deal you’ve been looking forward to.
