Why Investors Pass on Companies
We put together some of our favorite posts on pitching investors. Over at 500 startups, Edith Yeung has a great post on “The 7 (Pitching) Habits of Highly Effective Founders” that applies to any startup at any stage. Here are some of the key points:
#1 – Pitch the right investors – Don’t get in front of people that don’t invest in your company’s stage or product type
#2 – Pitch with a purpose – Inspire investors with your enthusiasm!
#3 – Curate your story –Don’t go too long. Learn to edit down.
#4 – Pitch like a professional –Explain why you’re qualified and demonstrate why you need money now
#5 – Understand the big picture –Pitch beyond the product and sell the idea as a company
#6 –24 hour follow-up –Send a thank you!
#7 –Show passion & honesty –This is your startup. Show your true self and always tell the truth.
From a VC perspective, last year Brad Feld outlined common reasons Foundry Group quickly passes on great opportunities (he estimates the firm could be turning down as much as 90% of companies they could be investing in). Most of their “quicks passes are categorized in the ‘it’s us, not you’ category”. Here were some of his reasons:
- The company is at the wrong stage
- The firm is focused on other opportunities
- The partners have scheduling conflicts and don’t want to slow roll an entrepreneur
For those of you that need a Seinfield flashback – Watch this
Finally, Zeynep Ilgaz listed her five favorite traits in a founder pitch that she heard as an angel investor. She cautions against simply trying to “stand out” and instead puts forth these five bullet points:
- Connect with the heart
- Connect with the head
- Don’t mimic a spreadsheet
- Have a great team dynamic
- Leave investors wanting more