I just reviewed several hundred startup pitches for Capital Factory. Most were on paper and video; 20 were invited to pitch in person.
Interesting patterns emerged:
- Everyone makes the same classes of error.
- Those who avoided just one of those errors stood out in the crowd.
- These are problems with the business concept or the founder’s attitude, not specific to raising angel money.
You’re probably making a lot of these errors too.
Not that I blame you! After all, these became clear to me only after seeing hundreds of applications; you don’t have the luxury of that perspective.
So for the next few weeks I’m doing a series on these mistakes and what to do about them. This post serves as a hyperlinked table of contents, so subscribe by email or RSS to get notified when new articles get posted.
Click here to see the 9 common pitching mistakes you’re probably making >
Jason Cohen is the founder of Smart Bear Software, maker of Code Collaborator, the world’s most popular tool for peer code review and winner of the Jolt Award. This post was originally published on his blog, and it is republished here with permission.
'Superior SEO' and 'unique features' are not competitive advantages.
You need one killer advantage that no one on Earth can beat you on. ('Cause you might get beaten on everything else!)
You don't need statistically-significant studies before you begin, but it's astonishing how many founders blaze ahead before they've found even a singleperson willing to give them money.
The two faults here are opposites: Believing that uniqueness means competition doesn't exist, or defining yourself by the competition instead of constructing your own message.
If your marketing strategy is to run A/B tests and build RSS subscribers, you've already lost.
We've all heard of the elevator pitch, but when asked to produce it almost no one succeeded. This is important whether or not you're raising money because it means you understand your customers and why they buy your stuff.
'Scratching your own itch' is how many great ideas begin, but it's not a business strategy. Often you assume your customer is the same as you -- sees the problem the same way, wants to solve it your way, and wants to pay for it.
But you're explicitly not like your customers; for one thing, you have enough initiative and insight to quit your job to start a company. It's easy to let your idiosyncratic preconceptions prevent you from observing what the larger market will accept.
You have all sorts of shortcomings: First startup, inexperienced, ignorant about how 'sales' works, buggy software, whatever.
None of it's a problem if you're willing to acknowledge and cope with it, but if you persist in lying to me and your customers about it, that's a problem. (And a lie by omission is twice the lie.)
I don't care that your resume doesn't prepare you for a startup -- mine didn't either! But if your answer to any question is 'How do I know? I just do,' then I know right away you're not only ignorant but incapable of fixing that ignorance.
How do I know this will result in your business drifting aimlessly until you finally run out of money? I just do.
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