Don’t Set Your Investment Pitches up to Fail
How come many start up companies with great products and oodles of promise struggle to win investment support for their ideas…while other, seemingly less exciting, ideas get funded every day?
Where are they going wrong?
What’s the biggest mistake entrepreneurs make in their investment pitches?
That’s a question I put to Paschal McGuire, Director of Entrepreneurship for the North East and North West of Ireland at Enterprise Ireland – the state development agency that helps high potential Irish SMEs to grow internationally through financial support, networks and advice.
“It’s when promoters focus on technical knowledge – often using far too much jargon – ahead of why we should back them, as people.
Most investors, including Enterprise Ireland, are more interested in ‘problems a start up wants to tackle’ and why ‘they’, the promoters, are likely to succeed than endless detail on how things work.”
What one tip would you give entrepreneurs to get attention from investors?
“Make sure you have a simple synopsis – telling potential investors what your big idea is, why it’s such a big deal and why ‘you’re’ likely to turn that idea into a reality.
You see, it’s not enough to show you’ve got a real business opportunity in mind…You also need to establish that you’ve assembled a team with the range of skills needed to make things happen – ranging from product development to finance, from sales and marketing to IT, and more.
For instance, what have you and the other promoters done so far or elsewhere that’ll boost an investor’s confidence in what your team can achieve?
Remember, ideas are plentiful; But if you can demonstrate a capacity to execute ideas you’ll set yourself apart from other start ups competing for the same investment monies.”
So the ‘why you’ question matters. Can you be more specific about what investors want to know?
“Sure. We really want to know what makes ‘you and your team’ unique. Specifically, what can you do that’s going to be different or better than your competitors? And can you demonstrate this?”
Over to you
What would you add to Paschal’s answers? Share your thoughts with a comment.
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