1. “I have an amazing idea”
Every entrepreneur believes that his or her idea is amazing. If you don’t, why even bother starting a company? However, instead of simply stating that your idea is amazing, you should prove to investors that it is. You can do so with a well thought out business plan, a compelling product, and raving customer reviews, just to name a few.
2. “All we need is money to build it”
It is a mistake to say that all you need is money to build your product because you also need money for monetizing and scaling it. Building a product is just the first step. When you make this statement, it implies that you misunderstand the very reason why your investors will invest in you. Their objective is to make money, and certainly not to just help you build your product.
3. “There is no competition”
Too many entrepreneurs think that if their product is disruptive, there is no competition. However, if this is actually the case, this is not good news. No competition means there is no demand, and if there is no demand, there is no future for your company. Just because you have come up with a better way to solve a problem does not mean that there are no other solutions on the market. It is just that they may be more costly or not as effective. Instead of saying “We have no competition”, you should say “We have competition, but here is why we are better.
4. “This is going to be a billion-dollar business”
Who does not want to become the next Facebook or Google? Unfortunately, statistically, this is not possible. Most companies fail, only some companies make an exit, and very few of them reach a billion dollar valuation. For you to claim at the early stages that you are going to be a billion-dollar business, is simply... ludicrous. Instead of dreaming about a billion dollar valuation, produce results proving that you can achieve it.
5. “Get in now before it is too late”
Now, this is the only statement you can actually make, but only if you are a startup in high demand. Most of the time you have no leverage and you are lucky if you get an investment. Therefore, it is wise not to create hype before you can justify it.
Thank you to Tamara Towbin for giving me an idea for this article.
To learn more about fundraising strategy and startup financing vehicles, check out Course # 5.
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