Are You Making These Common Fundraising Mistakes? Here's How to Avoid Them and Nail Your Investor Pitch!

So, you've got this ground breaking startup idea that's about to change the world. But wait, are you stumbling over the same old fundraising hurdles like everyone else? Don't worry; we've got your back. Let's dive into the common mistakes founders make when raising funds and pitching for investment, how you can steer clear of them, and what our best tips for pitching to investors are.

Mistake 1: The Never-Ending Monologue

You're eager to share every minute detail about your startup, its inception story, and even the colour of your office walls. Stop right there! Remember, brevity is key. Investors appreciate a concise pitch that hits the highlights without drowning them in unnecessary information. Grab their attention with the heart of your idea, not the extra toppings.

Mistake 2: Over-Complicating Your Pitch

Practice how to succinctly pitch your startup, plans and proposal to investors. Ensure you can clearly and easily articulate your value proposition. Don’t use jargon and make your business plan and financial model easy for anyone to understand. Keep this famous quote in mind:

"If you can't explain it simply then you don't understand it well enough" - Albert Einstein.

Mistake 3: Getting Carried Away with the Numbers

Numbers don't lie, and neither should you. Avoid the blunder of being unprepared when questioned about your financial projections and market research. Show investors you've crunched the numbers, understand your industry's landscape like the back of your hand, and have a clear strategy for scalability. Numbers speak volumes in the world of fundraising!

Mistake 4: All About the Money

While funding may be crucial for your startup, make sure your focus isn't solely on the money. Investors are not just ATM machines; they're strategic partners in your journey. Show them how their investment aligns with your vision, and how their expertise can fuel your startup's growth. It's not just about the cash; it's about building lasting relationships. Try to have regular contact with them, be open and ask for advice or for their opinions, and try to find lots of common ground that you can discuss to build rapport.

Mistake 5: Pitching to the Wrong Audience

Let's just say, don't go pitching vegan meat alternatives to a steakhouse owner... Tailor your pitch to suit your audience. Research your investors' interests and past investments. Understand what resonates with them and adapt your pitch accordingly. Personalisation goes a long way in making a lasting impression. Even with cold outreaches, tailor this to each investor to show them that you’ve done your research on them and are not just using a ‘machine gun approach’, hoping that one bullet hits the target.

Mistake 6: The Vanilla Pitch Without a Clear Story:

You're unique, your startup is unique, so why settle for a generic pitch? Inject your personality and passion into your presentation from the start. Investors meet loads of founders; make sure you stand out from the crowd by being authentically you. Use storytelling to bring your journey to life, and try to present a compelling narrative that explains your vision, market opportunity, and why your team is uniquely positioned to succeed.

Mistake 7: Not Demonstrating Traction: 

Investors want to see evidence that your business is gaining momentum, and is achieving market validation. Demonstrating traction is the easiest and best way to show this, and will impress and excite an investor too. This can be through simple user or customer numbers, revenue & sales figures, or a working product. However, if you’re at a very early (pre-seed) stage, use metrics such as: Pre-signs ups (say, from a landing page); partnerships, suppliers or organisations who have shown you support. Even social media followers and good PR stories can demonstrate traction and buzz around your startup.

Mistake 8: Overestimating Valuation:

Setting an unrealistically high valuation can deter investors. Be realistic and base your valuation on solid data, market research and comparables. You should have researched at least 5-10 comparable companies to yours, at different stages of growth and investment, and use these to benchmark where your startup is at and what the potential valuation can be.

Mistake 9: Ignoring Feedback:

Learning from investor feedback is a great opportunity to adjust and improve your pitch and strategy. Make sure you take notes and update your pitch accordingly. Also practice your pitch (out loud) to colleagues, friends or associates and gather their feedback too, as it can be invaluable! Remember that no one does a perfect pitch the first time round, but the benefit is that it's always good practice, as long as you improve each time.

Mistake 10: Appearing Desperate for Funds:

This can be a red flag for investors, so start your fundraising journey well in advance of your cash running out, and maintain a sense of confidence and control during discussions. Your goal for any first meeting with investors is to get a second meeting, so be patient with asking for funding too early and use your first airtime with investors to build a good relationship foundation and address any doubts they may have.

Mistake 11: Neglecting to Follow Up:

After pitching, it's important to engage with investors with timely and professional follow-ups to show that you are serious, professional and organised. You’ll notice that it’s common for investors to go silent on you after initial introductions. A key tip here is to send a follow-up email to them to try and re-ignite discussions, but to provide them with positive updates on your progress in the same message. This way, it sounds less pushy, and is a great excuse to highlight some wins and successes which may be the spark they need to re-engage.

Mistake 12: Giving Up Too Early!

Keep a relentless and persistent mindset – and don’t let the rejections get you down.

Investors are often wrong, so use those rejections to fuel you! AirBnB Co-founder & CEO Brian Chesky was rejected 7 times by VCs when trying to raise $150k for 10%. That 10% is now worth $90 billion!!

Keep a relentless and persistent mindset – and don’t let the rejections get you down.

How to NAIL Your Pitch:

• Hook 'Em Early: Start strong to grab attention.

• Visuals Speak Louder: Use visual aids to enhance your pitch.

• Practice Makes Perfect: Rehearse until you can pitch in your sleep.

• Feedback is Gold: Embrace feedback to refine your pitch further.

• Follow Up: Always follow up after your pitch; show that you're proactive and ready for the next steps.

Remember, fundraising is a journey, not a sprint. Learn from your mistakes, adapt, and keep pushing towards your goal with a persistent mindset. Your startup deserves the best shot, and by avoiding these common pitfalls, you're already ahead of the game!

So, founders, go forth and conquer those investor pitches! Good luck on your fundraising endeavours, you've got this! 🚀

Investability Assessment:

If you'd like to see how investable your business or startup idea currently is, then take a look at our new Startup Funding Readiness Assessment.

​It's a quick, 5-minute quick fire quiz that will determine how fundable your startup is in the eyes of investors, or how ready you are to start pitching for investment. We'll give you detailed feedback on how to improve your score and become more investable.