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Guess What Turns Off Investors In A Pitch

From unconvincing market analysis to a lack of differentiation, understanding the pitfalls that repel investors is crucial for a start-up's success

Guess What Turns Off Investors In A Pitch
StartupStockPhotos from Pixabay
POSTED ON August 20, 2023 6:46 PM

According to the report by Invest India, India has emerged as the third largest ecosystem for start-ups globally, with over 99,000 Department for Promotion of Industry and Internal Trade (DPIIT)-recognised start-ups and 108 unicorns. Furthermore, the Indian start-up ecosystem has seen exponential growth in the past few years and is further flourishing in the fast-paced and dynamic economy. 

A majority of these start-ups are not only developing innovative solutions and technologies but also generating large-scale employment. However, despite the growing number, the success rate of start-ups is currently very low. 

According to a Market Splash report, 90 per cent of new start-ups experience a failure rate and 10 per cent of businesses don't survive the first year. Thus, to become successful, you need to come up with an innovative business model to create your niche as well as convince investors to back your business in this competitive era.

In the current market scenario, more than a brilliant idea is needed to secure the backing of investors. The journey from concept to capital involves a carefully crafted pitch that showcases your business's potential and addresses concerns that can turn investors away. 

From unconvincing market analysis to a lack of differentiation, understanding the pitfalls that repel investors is crucial for a start-up's success. As a result, to reduce common mistakes that can hinder your fundraising efforts, your pitch deck has become more critical than ever for onboarding investors. 

So, let's delve into the guide to what turns down investors in a pitch and how to prevent it. And let's look at the shortfalls of start-ups that can make investors give them the cold shoulder.

Lack Of Market Analysis

As a start-up, you can spend significant time making business stories more appealing and coherent. However, bombarding a bunch of numbers, graphs, and charts in front of an investor and expecting them to be wowed is one of the biggest investor pitch deck mistakes. 

Even though numerous slides are packed with important material, if the slides are disjointed, your pitch may fall flat. Thus, to attract investor interest, you must first do your homework by analysing the market and thoroughly understand your target market. 

For instance, NanoClean is a start-up offering advanced nanotechnology-based cleaning solutions. They piqued investor curiosity with a comprehensive market analysis. They showcased the growing demand for eco-friendly air purifying products and how their technology outperformed competitors in terms of efficiency and sustainability.

Not Drawing Enough Attention To The Solution

While highlighting your product's features and benefits is crucial, investors are ultimately more interested in the problem your product solves. Too much emphasis on the product might divert attention away from the issues and make it difficult for investors to understand the value of your solution. 

Instead, ensure that you clearly define the problem you're attempting to solve and how your product addresses it in today's competitive landscape. In fact, investors want to see your competitive edge, so highlight any achievements, partnerships, or user adoption your start-up has garnered. 

For example, Dectrocel, a Healthcare start-up building scalable AI Medical Imaging Diagnostic Solutions, showcased successful lab tests and partnerships with research institutions in their pitch deck, proving that they were not just in the ideation stage but were making tangible strides toward their goals.

Ambiguity Of Vision And Mission

"Where do you see yourself in five years?" While this age-old question has become synonymous with unsuccessful HR techniques, as a company founder, you must have an answer in the pitch deck. 

As a start-up, you should be able to respond to the question in one sentence in your pitch. Because to invest in your idea, investors are keen to know about your long-term vision and how you intend to get there. 

Nonetheless, it's astounding how many firms don't know where they're going, don't articulate it in their pitch decks, or get it wrong more often than not. Thus, to prevent your start-up from failing, focus on tag lines in your pitch that capture your ultimate mission and vision in a simple yet significant way. 

For instance, Bodhi AI, a start-up focusing on personalised education through AI, stood out by highlighting its mission and vision in order to transform the online teaching experience. Investors were impressed by their unique approach to revolutionising education, leading to a successful funding round.

All Things Considered!

There is no denying the fact that the start-up landscape is competitive and investors are discerning. Thus, by following the guide of mistakes that start-ups can make and how to overcome them, you can transform your pitch from a stumbling block into a stepping stone toward securing the funding your start-up needs. 

In addition, incorporating these key elements into your pitch can dramatically increase your chances of convincing investors. However, it's important to note that the delivery and presentation style also play a significant role. 

A confident and passionate pitch that leaves investors intrigued and eager can make a world of difference in capturing the attention and trust of potential investors.

-        Vittal Ramakrishna, CEO and founder of fundraising platform POD World 

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