7 mistakes that are ruining your startup income (and what to do instead) | A businessman

With US venture capital fundraising at a 6-year low, raising investment capital for your startup has become more challenging than ever. Potential investors confirm their budgets and use a “wait and see” approach before risking their money. However, some of the best startups – like Airbnb, Uber and Square – have emerged during market downturns. So, if you are an entrepreneur looking for money in this area, you may be wondering about your chances of success.

As a former entrepreneur and now CEO of Buiderall, I have heard over 3,000 pitches and helped founders raise millions. In my experience, seven common mistakes often ruin fundraising efforts. If you are looking to raise money for a startup in this uncertain economic environment, be sure to avoid the following:

Mistake #1: Speeding up the volume

Most founders rush through their ranks, but speed isn’t always your friend in the venture capital world. Your goal is to create important points and let them resonate, not to finish your presentation as quickly as possible.

Think of it like telling a good joke at a party – you couldn’t rush to the punchline before everyone had a chance to understand the style, right? The same principle applies to coverage. You want your investors to listen to every word. But that is not possible if you are in a hurry or lose important information.

Another effective method is to take strategic breaks. Between slides or after making a key point, pause for about three seconds to let it sink in and watch your audience react. Don’t be afraid to be quiet. Tolerance in language can be a powerful strategy.

Related: What Every Investor Should Know About Raising Capital

Mistake #2: Skipping confidence markers and significant differences

Balancing detail and brevity is difficult, but important. There are important signs that you should share to help build trust and differentiate your business. While most founders want to focus on how good their product is, there are two questions that are arguably more important:

• Why is your team uniquely qualified to lead this business?
• How does your company stand out in the market?

In terms of team qualifications, don’t be shy to include details of years of experience, advanced university degrees, previous experience, current patents and/or interesting work experience. startup or business.

I once coached a founder who was struggling to raise money. After checking out his website, I said, “The problem is that you don’t have any real experience to begin with.” He then went on to tell me that he and his co-founder sold their last company for $80 million, but he thought it was worthless since it was in a different industry. Let me tell you, your past accomplishments are 100% important in whether or not investors will trust you with their money.

After that, I can guarantee that any amazing idea you come up with – we’ve probably already seen it. This begs the question, what will you do differently when you get to market? This is where your current performance is important: existing users, pre-registered users, received rights and strategic transactions are all affected. These facts show that you are not just another idea but a viable business that is already making waves.

Mistake #3: Talking too much and for too long

I know – this sounds like a contradiction based on the first point, but hear me out. Crying is another fatal flaw. You should plan for a nine minute rise, but you don’t want to “rush” your nine minutes. Instead, don’t hesitate about what to include – and what to cut – so the flow feels natural and you’re still delivering the essentials. make your business compelling.

I often ask new founders to sum up their pitch in just two sentences: What do you do, and why should I care? After that, you have less than 10 minutes to describe your market problem, market size, your business model, your solution, your process, your team, and your application. That means you need to be clear about what elements will effectively tell your story.

I’ve seen many founders panic and overdo it by filling the conversation with unnecessary details and fillers. This often has the opposite effect than what they intended. If you talk too much or too quickly, investors may think you’re not being direct, or they may get irritated and lose interest.

Related: 5 New Ways for Investors to Grow Capital in Today’s Market

Mistake #4: Forgetting who you’re looking for

Remember, you are targeting investors, not potential customers. Investors are not interested in how great your product is; they want to know about your market, margins, and differentiation.

I once sat in the lobby of a young women’s jewelry startup where the founder spent the entire time trying to sell me jewelry. As an investor, I was not the target audience and the tone fell flat. Instead of selling me on the business, he was selling me on the product. When they talk to investors, they want to hear about the business opportunity, not the product.

Mistake #5: Undermining your credibility with weak language

This may seem like unnecessary semantics, but words like “hope” indicate uncertainty, and investors don’t like to take advantage of “hope.” They want clear predictions backed by data and logic.

Instead of saying “we hope,” use phrases like “we will” or “we plan.” This change instantly increases the credibility of your sound. Be sure; your words should give confidence, not just a dream.

Here are some examples:

• Instead of saying, “We think our product will succeed,” reinforce your confidence by saying, “Our product is poised to succeed.” This subtle change gives certainty and strengthens your character.
• Replace “We believe our revenue will grow” with “Our estimates show our revenue will grow.” This does not sound strong but it also shows that your ideas are based on concrete data.
• Don’t say, “We aim to capture 10% of the market;” instead, we say, “We’re on track to capture 10% of the market.” This change shows that you are actively working towards a clear, achievable goal.
• Change sentences like “We expect to start in Q2” to “We will start in Q2.” This small change provides certainty and reliability, which are essential to build investor confidence.

These subtle changes in language replace hesitation and opportunity for independence. It emphasizes that your pitch is built on integrity and backed by a solid, well-thought-out plan.

Mistake #6: Using broad claims instead of accurate data points

When you’re pitching to investors, general requests can raise red flags, making investors wonder if you’re trying to hide the truth or lack necessary information.

For example, instead of saying, “We have a huge subscriber list,” look for specifics like, “We have over 20,000 subscribers.” Specific details not only clarify your requests but also boost your credibility and credibility significantly.

Here are some examples:

• Don’t say, “Our team has a lot of experience.” It says, “Our team has eight years of experience in this industry.”
• Replace “Our product is very sticky, and our customers rarely leave” with “Our product has an 89% customer retention rate.”
• Instead of “We expect faster growth,” it says, “Our estimates show 30% month-on-month growth in the fourth quarter.”
• Replace “We dominate the market” with “We currently have a 45% market share in our area.”

These phrase changes turn vague statements into concrete, data-backed statements that help build investor confidence and demonstrate that your mission is grounded in reality.

Mistake #7: Talking instead of showing

Our final lesson: show, don’t tell. Visualizing something rather than using words will have a greater impact and may be easier to remember. Instead of telling investors, “We have a good structure,” show screenshots of the structure and let them decide for themselves whether it’s good or not. Instead of saying, “We’ve grown tremendously over the years,” show a line or bar chart that shows your remarkable growth.

Another example: telling investors how much your customers love you is less influential than showing social media photos where your customers praise you in their own words. Remember this mantra: less talk, more pictures.

Low profile

Mastering the art of pitching involves more than just avoiding pitfalls – it’s about crafting a story that resonates with investors and building trust. However, by avoiding these seven mistakes, you greatly increase your chances of getting the funding needed to take your startup to the next level.

In today’s challenging economic climate, effective communication, showing rather than talking, and presenting data-backed arguments will set you apart. Entrepreneurs want to support entrepreneurs who can handle challenges and drive their businesses to success. Continue to improve your pitch, build strong relationships, and show investors why your startup is the one to bet on.