What Drives Investors Crazy in Pitches — Cleve Langton
I sent out a survey to qualified investors I know asking them what are the pitch killers that make them tune out and mentally run for the hills. They are all early stage investors. I sent out 57 surveys, got 46 very full responses back. Here’s the list that had almost universal agreement.
— Too much time on the runway waiting to take off! Meaningless introductions, experience that sounds good (titles, seniority) but are not directly relevant to the challenge. If the presentation is first up, a slow start may be OK; being #15 of 20, the investor is looking for reasons NOT to like the team or concept.
— Vague use of funds: The investor wants to know exactly how their investment will be used and how it will increase valuation in the next round. Use of funds that’s too general and perceived as stuck in at the end of the presentation is a major turnoff.
— Strength of the moat: Too many founders talk about IP and patent protection as the moat — it can’t be that alone. It can be a part of — but not the only — defense. IP and patents are only as good as your financial ability to defend. Stress product-related insulation that is hard for competitors to overcome and support it with facts.
— Jargon: Drives them crazy! Possibly fits in highly technical pitches or healthcare pitches but only if the audience is in the field and knows the jargon and abbreviations. If not, investors find it offensive, and many said it’s downright arrogant.
— Bad presentation skills: They don’t care if you are the CEO. Their logic is that if you can’t be compelling to them, how can you convince buyers and customers? If you are a subpar presenter (be introspective), do a quick intro and turn it over to a team member who is better. You won’t get dinged for that. You get faulted if you bore them or screw up a slide share.
— Arrogance: This is a corollary to presentation skills. You might think you’re great — and might actually be — but in this situation you are the one in a subordinate role. Investors want to see confidence but hate any signs of arrogance. That says you will be hard to work with — with employees, suppliers and with them if they are significant investors. Implied “trust me” statements and too many “I’s,” and not enough “we” are viewed as early stage company killers.
— Market size: “This is a $25 billion market, and we can secure a 2% share by year III.” Don’t say it unless you can support it with some type of objective validation. Investors want you to show (and support) how you will displace competitors initially, but more importantly on a sustained basis. Otherwise, it’s perceived as little more than fluff.
— Strong ending: Recap where and how you will achieve your goals and do it with “controlled passion.” Make short bullets that they will include in their notes of why they should invest.
I received a lot of other great advice, but these are the points that had the greatest unanimity among investors. Happy to share the full list if you ping me.
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