Why Did Your Pitch Fail?
Is it your Idea? or actually you? Read this interesting article to know why majority of the pitches fail!
An entrepreneur has a special bond with pitching. They share a love-hate relationship. It is the happiest and the scariest day of their entrepreneurial journey, if it goes well. It has been estimated that more than 90 per cent of all the ideas pitched to angel investors and venture capitalists are rejected. The number is shockingly large but also true.
This huge number of rejections has given rise to a new profession of pitch and speech coaches who never take any responsibility for the effectiveness of your pitch. After reading many articles and attending a few seminars and webinars on pitching, this article lists down some of the most common if not obvious reasons that lead to rejection.
1. You didn’t believe in your Idea
The first and the most obvious one is that you don’t believe in your idea. If you identify yourself who does not one hundred percent believe in the idea then you don’t need to read any further. You have to believe in the idea from your heart and convey that same energy in your actions and words otherwise there is little to no chance of succeeding in the cutthroat world of start-ups and entrepreneurship.
2. Wrong Investor (Is that even a thing?)
Another major reason you might not getting funding is that you pitched to the wrong investor. Yes it’s possible. It is important to note that even though they have many similar traits not all investors are alike. Each investor has their category of products and services in which they invest. Many investors also take note of the stage your start-up has reached. Therefore, it is important to do your homework and find out the right investor for you. Even if your pitch went perfect and your idea is out of this world, you won’t be getting a dime if the investor you’re making the pitch to is not interested in that domain and stage.
3. You Lacked Confidence
You lack confidence — this is an important point that you must address during preparing for a pitch. You cannot get the investors interested in your idea if you are not confident. It may be the case that you are confident on your idea but if you depict otherwise then there is not much the investors can look forward to. Even if you lack in confidence there is no harm in appearing to be confident for your benefit. You should watch as many tutorials as required and practice multiple times before your friends and family and even in front of the mirror beforehand. These are some common signs that give the impression that you are under confident — beating around the bush, unnatural shrill voice, fidgeting fingers, touching your face.
4. You were Over Confident
Investors are the real life goldilocks when it comes to pitcher’s confidence that is if you lack it, they may feel hesitant in giving you their money but if you are arrogant and cocky, they will outright reject your pitch because nobody likes an arrogant person. You should make a mental note right before going in for the pitch that the person you are pitching to is much smarter than you are and that’s why YOU are the one pitching to HIM. If appear to be cocky or a know it all, other people will be less keen in working with you. Attitude adjustment is an important part of pitching and should not be taken for granted.
6. Everything was foggy
While this point may not be applicable to everyone, but another reason the investors might be less interested is that your concepts are not clear. It is very important for an investor to know that you know all parts of your idea — the technology, the execution, the marketing etc. You are expected to know every nook and corner of your idea. It might not be true for start-ups using some black box technologies but otherwise you need to make sure that your concepts are clear and you know the fundamentals of your idea.
7. The Length
Your pitch is way too long. Though this is not that much of an issue if your idea is THAT BIG but it is unsaid rule that a pitch should be complete under 10 minutes or less. Longer pitches lose the interest of the viewers and that leads to you losing your funding.
8. You lied!
Lying is a sin. The entrepreneur is not allowed to lie on a pitch. If you do sooner rather than later that lie will be caught. Even if you get the funding on basis of the lie, the investor may pull the money out when the lie is caught. In most cases, the lies never go through as the investors catch them. It is recommended to cover all bases before making the pitch so that you know answers to all the questions. If the situation may arise that you are asked a question you are not prepared for, you should let the investor know. You should also avoid making claims that there is no competition in the market because it only shows your lack of research and overconfidence.
While these were some of the major reasons your pitch may have gone wrong, there are still some common mistakes.
Let’s have a look at them:
You used a common template. Pitches are something made with heart and sweat and blood. You have to make your own pitch from the scratch just like your idea and not be lazy with it. It is very imperative that your pitch looks like it has been made by you, for your idea only and not taken as a common internet template with the content changes. The investors will NOT appreciate this.
Not being open to criticism. If you have pitched the same idea to a couple of investors and they all brought out the same concerns, it is a sure sign that you need to work a little more on your idea. You cannot be defensive in front of them when they point out a flaw or don’t appreciate your ideas. You should remember that the person giving the suggestion is more experienced than you and given the point that he will be making an investment in your idea, he will always wish the best for you.
You are pitching them your idea and not selling your product. Many do the mistake of pressuring the investors to invest by making comments like — ‘this is a deal of a lifetime’, ‘if you don’t get in now it might be too late’, ‘I have many other investors in line’, etc. This will annoy the investors and never work in your favor.
These are some of the most common reasons that a pitch is rejected. You would have noticed that most of these ideas are not actually related to the nitty-gritty of the pitch but more focused on the person who will be giving the pitch. This was not a subconscious decision but it is designed so because there are many great ideas in the world and many of which pass through the investors on a daily basis.
The most important thing to know before making a pitch is that:
Investors do not invest in the ideas; they invest in the people behind them.
Well, I hope that you enjoyed the article and it’ll help you correct your next pitch. Follow ‘The Entrepreneurial Diary’ for more such amazing content.