Presenting your business to anyone is a challenge. Add in some awkward questions from investors and you could leave feeling pretty disappointed. To save you from such a fate, we’ve found people who’ve experienced pitches going wrong so you can learn from their mistakes…
Being too technical
“We invest in hardware start-ups, so that means that we talk to a lot of technical people who are trying to build futuristic products,” Derk Steemers, brand strategist and mentor at Arkley Venture Capital, says. “What happens often is that they can't translate their technical vision to that of your average person. In the worst case scenario that means we can't have a discussion on the future of the company.
“Once I was told why a company would solve every problem in their industry, but they kept using jargon that was new to me. With every question I asked, they got more technical, and I felt like I understood even less about the problems in their industry then before I met them. Instead they should have focused on how problem A led to problem B and their product would solve it all.”
If the investors don’t understand how your product solves problems, they’re not going to give you any money. Steemers recommends kicking your pitch off with a “TL;DR version”, which explains fully but succinctly what it is that you’re selling, and then expanding on that later in your pitch.
Not being professional
In any kind of pitch, professionality is key. Matt Warren, founder of Veeqo, discovered this the hard way.
“I was looking to crowdfund my idea through Seedrs,” he says. “They encouraged we should make a video of the product in use, which we would the use to pitch to potential investors.
“I didn’t have one at the time so thought it would be a good idea to knock up a homemade video of the product in action. What I wanted was the investors to be impressed with what I had created. However, the video was so bad and it looked so unprofessional.
“I had faith in my product but the video was so bad it didn’t instil any confidence in the investors to part with their money.”
Looking back, he admits he wishes he had invested money in making a professional video. “The cost of this video would have been nothing compared to the increased investment I would have received.”
Not doing your research
Before you walk into a pitch, you should know everything you can about the people that you’re pitching to and what their business interests are.
“We invited several agencies to pitch for a digital marketing contract, amongst them was a brand new agency (which will remain nameless), run by an extraordinarily impressive young man. His start-up agency had some brilliant case studies and a stellar client list. His agency’s pitch was perfect… for the first 20 minutes,” James Armstrong, a consultant at Roman Blinds Direct, says. “It all fell apart when he began talking about aggressively targeting another brand, one he had analysed and determined to be a competitor.
“Unfortunately for him, we also own the brand he’d decided to target, a fact that’s fairly obvious to anyone who spends a few minutes looking at our website. And the sites are not in competition with each other, since they offer entirely different products.”
While he could have rescued himself here, James says, by apologising and not getting defensive. This particular entrepreneur took the opposite route. “When these facts were pointed out to him, this previously calm and confident entrepreneur completely lost it, becoming very defensive, blaming his business partner, his employees and even seeming to blame us at one point for a ‘cheap trick’ designed to catch him out. There was no way for him to recover after that.”
Getting the valuation wrong
When you’re pitching a business, it’s important to know what it’s worth, which Rich Pleeth, founder of social media app Sup, found out the hard way. “We made our fair share of mistakes when pitching,” he admits. “But the biggest was going in with a valuation that was too high, it’s super hard to work out what valuation you should be going for. And when you have a Powerpoint deck, which is all we had when pitching, it makes it very hard to put a value on it. We went in way, way too high and lost a load of potential investors because of it.”
Not double checking your product
When Jordan Daykin, founder and MD of GripIt Fixings, went on Dragons’ Den he faced the embarrassment of his product not holding up. “I had a display, which was a radiator attached to a plasterboard wall using GripIt fixings. The idea was to demonstrate the capabilities of my product – how strong it was,” he explains. “However, this didn’t go to plan and Peter Jones was able to pull the radiator off the wall, making it look as though the fixings weren’t good enough.
“I could have lost the chance to secure any investment at this point if I had become flustered by the situation, but I knew it wasn’t a problem with my product. I pride myself in knowing every part of my business and knowing my product inside out helped me overcome the situation in the face of adversity – with the cameras filming too.”
Daykin admits that things won’t always go according to plan. “You have to be prepared for this – that is the only way you can rescue the situation,” he says. “Knowing your product, you business and the market will really help you. If you can answer all the questions with confidence it will show that you know what you are doing and that you understand the market you are in. Don’t get overwhelmed by the situation. Keep calm and just explain the issue. This can seem like a hard thing to do, but being unflappable will help you get your message across and is a key quality of a successful entrepreneur.”