Last week, I talked about some things that are deal-breakers when you're pitching. With any pitch, of course, you need a viable idea and evidence to back it up, but try to remember that potential investors are listening to your pitch on a lot of different levels; if something feels "off" to them, it can turn them off. As we often say on Dragon's Den, we invest in people, not ideas. So today I'd like to concentrate on some of the between-the-lines "people" stuff that can really tip the balance negatively even when on the surface, the pitch sounds good.
Of course you're optimistic about your business proposition. Optimism is key. I don't know many depressives who've made it big as entrepreneurs. But there's a big difference between being wildly enthusiastic about your own prospects--sometimes even to the point of being delusional--and being cautiously optimistic. When you're asking an investor to hand over money, cautious optimism is the way to go.
In a business relationship, just as with any other kind, promising something that you can't possibly deliver only leads to trouble. So if you base your projections on inflated expectations, and six months down the road you've only done half the business you said you were going to do—well, good luck with that. Hell hath no fury like an impatient investor, in my experience. However, if your projections have been realistic and your numbers were backed by careful research, you have a much better chance of keeping investors happy.
Don't whine, plead or rail about all the money you've invested
This one may seem self-evident, but you'd be surprised how many people kick off a pitch railing about all the money they've spent to date. Sometimes, there's even a sad sack routine about how this is the last stop on the line and if they don't get a cash infusion soon, they'll be ruined.
On Dragon's Den not long ago, a couple came looking for investors to move forward their adhesive 3D wall art product. The pair had clearly put their heart and soul into their venture, but they had weathered some serious setbacks. In the process, they'd lost several hundred thousand dollars and their home, and the stress was taking a toll on their relationship. Nevertheless, they were determined to keep going.
Whether I thought it was a wise decision for them to keep going or not, I had a great deal of compassion for these people. I know first-hand what it is like to see something you believe in passionately (and have sacrificed greatly to support) heading further and further down a dark road. But I also know that while it's fine and usually necessary to tell an investor how much money you've sunk into a project, going on about your troubles is a terrible idea. You might get sympathy, but you won't get financial backing that way. Investors are business people, not philanthropists.
Stay tuned for the third and final post in this series next week. In the meantime, what's your view? Do you have any pitching don'ts of your own—or any surefire techniques that never fail?