What Shouldn’t Be In Your Investor Pitch?

You've worked really hard creating a really solid investor pitch about your company. You’ve rehearsed your investor pitch, and you feel ready to go.

Then you start pitching investors, but something isn’t right. The investor pitch is still not working.

Investors are not biting. And the problem is you don’t get a second chance when you’re raising money.

You’re usually are on your own to find and correct your mistakes. That’s why creating a great investor pitch isn’t easy. It takes time, and a lot of iterations, to get your pitch right.

So, I thought it would helpful to focus on what not to do in an investor pitch. I’ve made many of these mistakes myself, and I’d really like to help you get your pitch right quicker.

Without further adieu here are some common pitching mistakes I’ve seen people make:

A. Putting your board of advisors in your pitch deck.

You got a Senior Director from Microsoft, a professor from UC Berkeley, and a Vice President from Facebook to “advise you”. It’s great, no doubt, to have such prestigious people helping you.

The problem is investors know that the advisors aren’t running the company. They know an advisor's impact is minimal at best.

So, unless you’ve got someone like Mark Zuckerberg on your board of advisors no one cares. Otherwise, put the board of advisors in your back up slides.

B. You have a wall of text in your pitch deck.

Nothing brings out the investors iPhones faster than a wall of text.

You’ll find out really fast that most investors just don’t have the patience to read through a wall of text.

I mean, do you want to look at a slide that looks like this?

So lose the text and really make it simple to follow. Instead make much better use of graphics with limited text to get your message across.

C. You're jamming too much stuff on one slide.

Aesthetics matter.

After all, the visual picture is the first thing your audience will see. Here’s the first thought someone has when they see a wall of text or too much stuff on one slide:

“I’ve got to figure out all of this?! Forget it. I’ll catch up on email.” Now you’ve lost your audience.

D. Your graphs don't have an axis.

It’s a pet peeve of mine, but please, please define what the units are for your graphs. You like you’re hiding things when you don’t tell your audience what the units are for an axis.

Remember your goal is making it really easy for your audience to see what you’re trying to say.

E. Graphics for your financials.

This one’s even a bigger pet peeve of mine. But get rid of the classic hockey stick financials.

Instead, replace them with a classic, old-school, spreadsheet pro-forma financials. And don’t just show the revenue, please give your audience a complete picture of your business.

So make sure your audience can see in one spreadsheet your revenue, profitability, the cash requirements, and headcount. Now your audience can see in one simple spreadsheet the financial picture of your company.

F. Don’t try and get too technical.

You want to show how great your invention is. I get it.

And everyone loves talking about what they really know. That’s where you have to be really, really careful.

You run a huge risk of talking over your audience (and having those iPhones come out) and losing your audience in the process. The trick is explaining the technical brilliance of your company in layman’s terms.

A simple way to see if you’ve got this right is to explain your idea to someone who isn’t a technical expert. You know you’re on the right track if the person can explain your idea back to you.

G. Don’t say you need 1% market share to succeed.

I’ve seen this one too often to count, but the old, “we only need 1% of the market to build a big company” strategy doesn’t work.

The problem is you’re not sizing your market correctly when you do that. And this likely means to your audience that you haven’t correctly identified and sized the sub-markets you need to be successful.

You need to keep breaking the markets down until your market share is a meaningful number. I’d say you’re looking for at least 10% market share to make your strategy believable.

H. Don’t put your exit strategy in your deck.

Oh man is this a bad, bad idea.

Just ask yourself this question, “Who knows more about exit strategies. You or your investors?”

You are setting yourself up for a bad result no matter what you put in the slide. Just leave your exit strategy out.

Now, you likely will get asked the exit strategy question. Just remember that the question is a trap.

Your first response should usually be, “We’re focused on building a great company. The exit strategy will take care of itself.”

It is especially important to answer this way if you are an early stage company. Investors are going to get worried that you’re not focused on building something big (this limits their potential return) if you start talking about your exit early on.

Let the investors lead the conversation. They know your options quite well. If they ask you who are the possible acquirers, then give them your list.

I. Don’t use a designer to help with your slide deck.

You think that using a designer to help make your deck look more professional will be just the thing to put you over the top with investors. The only problem is that investors still aren’t biting.

Making your deck look to flashy gets in the way of your message. You’re likely better off with just a plain white background, minimal text and simple graphics instead.

What should be in your investor pitch, now that we’ve covered what shouldn’t be in your pitch?

Try and cut your whole investor pitch down to one slide. That’s right, one slide.

You want to be able to tell your audience on one slide:

What your company does, and…
Why you’re 10X (or more) better than anything else out there, and…
How big the opportunity is

Make this slide the first slide in your investor pitch. The rest of your pitch just goes into more detail supporting your first slide.