The 2 Biggest Mistakes Founders Make When Pitching Their Ideas from Someone Who’s Invested in Startups Across Industries

Ultimately, you should use your pitch as a “checklist” for vetting yourself and for making sure you have everything done. 

As an investor in multiple startups and as the co-founder and CEO of VentureDevs, when it comes to founder pitches, I’ve seen the good, the bad, and the straight-up ugly.

Here’s what I know: The absolute best pitches are those that use data to show what the company is already doing well. They explain how the company is making money, how well they know their market, and whether they’re showing signs of growth. They illustrate not just the potential of an idea, but the founder’s ability to execute and bring that idea to life and to grow.

The worst pitches, on the other hand, come from founders who don’t even attempt to prove market validation––who only have an idea, and who haven’t really attempted to flesh it out. For investors, that’s an inherently riskier ask, and one most aren’t willing to take.

Now, if you’re a founder who currently falls more into this second camp––which many first-time founders do––there is a silver lining: most investors don’t make consequential judgments about a person or their project after just one pitch. In that first pitch, you do have to pique their interest enough for them to want to explore more. Without that, your chances are probably dead. But if you do get to that next stage, it’s wise to be prepared for a potentially long vetting process.

Keep in mind that the investor is evaluating you just as much as your idea or company. They’re evaluating your ongoing style of communication, your ability to follow through, your commitment as proven during meetings held over the course of three to six months, etc. All of this is just as—if not more—important than a perfect pitch.

To that end, there are two crucial mistakes I often see founders make during the pitch process that you should make sure to avoid:

1) Not showing investors finite proof that there’s a market for your product or idea.

It can’t be said enough: In your pitch, investors want to see evidence that your idea will work and resonate with your target market. Ideas themselves are cheap, and investors listen to thousands of them year over year. To stand out, your pitch must include proof that your idea is not only good but also that people really want what you are pitching.

Moreover, you should provide a blueprint for how your idea will make money, and that blueprint should come complete with empirical evidence supporting your confidence. 

Truth be told, if you haven’t figured out that “how,” or if you haven’t done the work to substantiate your confidence in your idea’s market potential, you shouldn’t be talking to investors. Conducting research to validate your market potential is a necessary first step. Plus, there’s really no excuse for not doing it. You can conduct much of your market research for free (or at least very cheaply) just by simply talking to potential users.

It’s a matter of identifying where you’re going to attract your market, and how. 

This is essential component investors look for when evaluating pitches. It’s not enough for investors to hear, “Oh, I’m going to do some paid advertising and work with influencers on Instagram.” What they need to see, instead, is a plan informed by research and acquired evidence. Did you do some small test of the returns on your paid advertising? How much will those influencers charge you, and how much traffic can they guarantee you?

Now, some founders believe that they can’t conduct market research without a product. But that’s just not true—plain and simple. You don’t need a product to pitch or have a conversation about a concept. You don’t need a product to gauge interest in an idea. Even being able to tell investors, “I spoke with 500 people over the last two months, and 95% of them loved my idea and signed up for email updates, and the 5% who didn’t love it actually gave me some critical feedback,” is much more meaningful for investors to hear. It’s more likely to instill confidence.

In a B2B pitch, that kind of informal research is even easier to conduct. You can ask companies whether they’d be interested in utilizing your product or service once it’s ready. If 90 out of 100 say they would and sign a Letter of Intent (LOI), even though it’s not legally binding, it helps investors clear a certain mental hurdle, which in turn helps them start trusting you.

And if nothing else, it shows that you have rolled up your sleeves, put yourself (and your idea) out there, and can show some empirical evidence testifying to its utility––which is much more meaningful than simply expecting your investor to take a blind leap of faith.

2) Using made-up numbers to “back up” your product or idea.

The only thing worse than a lack of data in a pitch? Fake data.

Look, your data doesn’t mean anything unless you can back it up. Moreover, lying or embellishing in a pitch to impress investors––magically conjuring projections like, “When we have 10,000 users, X, Y, and Z will certainly happen,”––doesn’t reflect well on you. It either shows that you’re flippant or that you’re disingenuous. And, surprise: investors don’t want to partner with founders they deem careless or dishonest.

This is another common mistake made by founders who think of raising money as the crucial first step in their company-building journey. But the truth is, you shouldn’t be raising money if you have already experienced real success or received feedback suggesting your idea will work.

In fact, raising money should be the last step you take in your foundational build order.

Ultimately, you should use your pitch as a “checklist” for vetting yourself and for making sure you have everything done. 

At the end of the day, seeing as how pitching investors is only something you should start thinking about once you’ve already invested heavily in yourself and in your idea––nurturing it, improving it, proving its market potential––it’s helpful to think of the pitch as a kind of final checklist. It can double as a means of vetting yourself and your preparedness. The deck, in this sense, should act as a kind of roadmap tracking your journey from mere idea to something substantiated by data.

If your pitch is done correctly, this roadmap will hopefully result in funding. But more importantly, it will demonstrate all you’ve done to invest in yourself—an investment that will be more likely to lead your company to success, which is the real goal anyway.

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This piece was originally published on Minutes.com.