4 investor pitch peeves

I attended a New York Entrepreneur Week panel today about raising seed and angel capital. The panel of seasoned investor consisted of: Brian Cohen and Geoff Judge from NY Angels, Owen Davis from NYC Seed, Jay Levy from Zelkova Ventures, and Dave McClure from Founders Fund.

One of my favorite questions was “What are your biggest pet peeves about how startups make their pitches?” Here are the top four:

1)      Pitching your idea, not the problem you are solving

2)      Ignoring the environment, including market size, trends and competition

3)      Lack of deep knowledge about the customer – often as the result of developing products in a library instead of out amongst customers

4)      Failing to explain founders’ professional accomplishments in quantitative terms (e.g. Instead of just “john ran marketing at xyz co”, think “as VP marketing at xyz co, John reduced customer acquisition costs by 25% and attracted 250K unique visitors in two years.”

Got any pitch peeves of your own? Please share.

6 Responses to 4 investor pitch peeves

  1. It’s always something we do wrong. There’s no such thing as the perfect pitch anymore. Can you understand the Twitter business model in 10 slides. I doubt it. People are all in search of Wow, and you’re no sooner 2 slides in than they’re telling you to pick it up and checking their BB’s. My advice to investors is to slow down, seek to understand and allow the Entrepreneurs the full hour to impart their idea. Sure some will be bad, but remember who the customer is here.

  2. davidronick says:

    Fair enough, but the founders are the ones seeking capital, so they’ve got to win over investors. Any founder can learn to find the right investors, and pitch them in the right way. Whether they’ve got the right team, idea and execution plan is another story…

  3. Personally I think most Entrepreneurs have it wrong. You don’t have to win over the investor. You have to solve a customer problem, drive to measurable, sustainable profitable revenue from volume and then at the appropriate time engage with a potential investor whose capital can accelerate you to the next milestone. For too many entrepreneurs funding is a goal – it should be a milestone. If you’re doing everything else right (team, execution etc) then the story plays out better.

    One other thing to remember. Funding is emotional and subjective. Investors pass on great deals everyday and invest in others that leave Entrepreneurs scratching their heads. Focus on the customer problem and building a sustainable business, it’s much more satisfying.

  4. Matt says:

    Great points. The key is a true product or service complimented by a real revenue model. Revenue models is where the dot com bust went wrong, companies were build on the premise of ‘build it and they will come’. I agree with Peter “You have to solve a customer problem, drive to measurable, sustainable profitable revenue ”

    We are in the middle of a start-up based on our Industry experience (15 years). It compliments our current offerings given it is the same customer base and provides similiar results for our clients (drive more sales and build brand loyalty) as our current products.

    We are also self-funded at this point and have already made our first “sale” prior to our May 1st launch. We have short-term goals like go-live, sign on major brands as well as long term goals like integrating with retailer POS, and providing additional complimentary services for the brands we sign on.

  5. You’re spot on. Business model before Business plan. Customer problem before Investor pitch. Validate with a real customer before you meet with investors. That way you won’t be put off from succeeding by them passing on you.

  6. Funny, #1 is my enormous pet peeve – entreprenuers’ attachment to their ideas over models so much that I made it my blog post yesterday. Must be in the collective consciousness … http://www.dailyworth.com/blog/403-profits-come-from-models-not-ideas

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