Get All Access for $5/mo

10 Mistakes to Avoid When Pitching Investors (Infographic) For many entrepreneurs looking to start a business, getting access to capital can be the make-or-break moment to a successful launch.

By Catherine Clifford

Opinions expressed by Entrepreneur contributors are their own.

Shutterstock.com

Like it or not, money is the lifeblood of a business. If you are on the hunt for capital and have landed a meeting with an investor, your first impression can either be a deal breaker or money in the bank.

According to Founder Institute, an early-stage startup accelerator in Mountain View, Calif., one of the biggest flubs rookies make in an investor presentation pitch is failing to include charts and graphs. If you aren't sure how to go about making charts and graphs that relate to your financial projections, you can consider hiring a business student or a certified public accountant for a day to help. Also, the institute says, steer clear of promising potential investors that your startup is going to be worth $1 billion by its fifth year. Investors want conservative estimates that they can trust, not pie-in-the-sky guesstimates.

Related: Hunting for Business Ideas? Consider Looking at These 8 Hot Industries

Other tips from the Founder Institute include:

  • Avoid a "hard coded" financial spreadsheet in your presentation – that is, don't make your numbers unchangeable in a spreadsheet. Present your information so that investors can play with your various financial inputs to see how your business model will survive in changing conditions.
  • Skip what's known as a "top down" financial forecast where you assume that your company will automatically win a percentage of some existing market. Instead, use what's called "bottom up" forecasting, where you base your financial projections on an actual budget: essentially, how many items you are going to sell multiplied by how much each is worth.
  • Talk about the size of your total addressable market (TAM), but don't focus on it. For example, if you are creating an iPhone game for women ages 35 and up, the size of the entire gaming industry would be your total addressable market and would be largely irrelevant. Instead, research your serviceable addressable market (SAM), which in this example would be the total market for women over the age of 35.

In the infographic below, Founder Institute offers a list of the 10 rookie pitching mistakes it sees on a regular basis.

Related: Entrepreneurship: Risks You Need to Consider (Infographic)

10 Mistakes to Avoid When Pitching Investors

Catherine Clifford

Frequently covers crowdfunding, the sharing economy and social entrepreneurship.

Catherine Clifford is a senior writer at Entrepreneur.com. Previously, she was the small business reporter at CNNMoney and an assistant in the New York bureau for CNN. Catherine attended Columbia University where she earned a bachelor's degree. She lives in Brooklyn, N.Y. Email her at CClifford@entrepreneur.com. You can follow her on Twitter at @CatClifford.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Editor's Pick

Business News

How to Be a Billionaire By 25, According to a College Dropout Turned CEO Worth $1.6 Billion

Austin Russell became the world's youngest self-made billionaire in 2020 at age 25.

Living

Taylor Swift Has a Lucky Number. And She's Not the Only High Performer Who Leans Into Superstitions to Boost Confidence.

Even megastars like Swift need a little extra something to get them in the right mindset when it is game time.

Business Ideas

63 Small Business Ideas to Start in 2024

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2024.

Marketing

SEO Trends You Need to Be Aware of Right Now, According to a Seasoned Pro

Navigate the future of search engine optimization to elevate your online presence and drive meaningful engagement.