The Truth About Start-Up Pitch Success
Raise your hand if this sounds familiar:
Someone you know has a really good idea for a new business. That person – the founder – is excited. This idea is the thing they spend all their time thinking about, working on, and believing in. They love the idea. Maybe their friends like it too. There’s only one problem: launching this kind of business requires money – more money, perhaps, than the founder has on hand. They make the decision to recruit some investors, but figuring out where to start, or how to explain the business, is immediately overwhelming.
Ultimately, and with more than a few starts and stops, a pitch deck is created. That’s what start-up founders do, right? They make decks and rehearse pitches. This pitch gets practiced in the shower and while stuck in traffic. Any family member sitting still for a few minutes is likely to get pitched until – finally – that first official investor meeting is set. It’s game time now. Let’s go.
Ten minutes after getting in front of their investor, and with what feels like everything on the line, it’s game over. The meeting ends without a deal, and the founder is left wondering what went wrong, who to blame, and how to fix it.
That kind of story might be too familiar – maybe painfully so. Here’s the truth about start-up pitch success: it can be a hard thing to achieve, and it’s likely to include more than a few similar stories. Believe it or not, it’s the pitch decks themselves that account for many of the mistakes.
Where Start-Up Pitches Fail
Your pitch deck is probably failing for more than just one reason, and we’re about to tell you why. In the meantime, take a deep breath and know this: you are not on your own here. We’re going to get through this together, and with some help, your next pitch meeting is going to be infinitely better than your last. Right now, though, we have work to do.
Dealing with a problem begins with an acknowledgment that something – possibly several things – is wrong. In this situation, it’s your pitch deck. In a broader sense, it’s nearly every pitch deck. Over the next few sections, we’re going to help you understand where pitch decks fail, why failure is all but guaranteed, and what steps you can take to avoid it. Here we go.
You Have an Idea, Not a Business
Yes, we know that some well-meaning mentor or podcast host told you to think like a business. That’s not necessarily bad advice – as long as you remember that having a great idea or thinking a certain way aren’t the only things required to start a successful company.
Don’t miss the point, here. Ideas are great and we love them. The idea is the inception; the moment it all begins. Without great ideas, there would be no great businesses. There’s only one issue: no matter how interesting your idea is, and regardless of how much time you spent describing it in your pitch deck, it still isn’t a business. Mistaking your start-up idea for a full-fledged company is a guaranteed way for your pitch deck to fail.
Businesses have financials like P&L statements and balance sheets. When someone invests in an established business, these pieces of information clarify the financial picture and inform their decision. This is a luxury that start-ups don’t have, but the story doesn’t have to end there.
Projections can be made and estimates should be provided. But don’t forget that no matter how certain your future business success seems to you, a good investor lacks the same strong emotions.
You Didn’t Participate in Pitching Competitions
We’re going to cut to the chase here. Sometimes pitch decks fail because not enough time was spent in preparation or practice. Bad news for people trying to wing it: when this happens, it shows. A lot of investors meet with start-up founders regularly. When you show up with a sloppy presentation or a thrown-together pitch, they have something to compare you to. You want to set the bar here, not struggle to reach it. Thankfully, you have options.
While it may feel like Shark Tank, you don’t have to go on television to get practice pitching your idea. Competitions exist, and virtual as well as in-person platforms are available. In both settings, you’ll have the chance to get comfortable sharing your idea with strangers. Don’t get frustrated if it feels like people are poking holes in your idea. Even if you’re just getting up in front of friends and family to work out your rhythm and flow, allow them to ask questions and let those guide your approach and tighten your pitch. More often than not, investors appreciate – and even look for – founders who can handle feedback and criticism. The expression that “people invest in people” is true. Investors want to know why are you the right individual or team to bring them success once they make their investment.
Getting this right, and with the help of some much-needed give and take, you’ll be better prepared for your next one-on-one.
Why Failure is All But Guaranteed
As technology goes, a pitch deck is certainly more evolved than an easel and some markers – and when PowerPoint first came onto the scene, it was revolutionary. Originally only available on Mac, Microsoft released its popular version three years later…in 1990. Even as other software has joined the market, and despite having better graphics, animation options, and fonts, the antiquated technology used to create a pitch deck is largely the same as it was more than 30 years ago.
Relying exclusively on your pitch deck to do the work of attracting investors and converting them from prospects to shareholders is difficult. It’s a bit like asking your dog to wash the dishes. Your plates may get licked clean, but you’re probably not going to want to eat off of them afterward. With that visual in mind, here are two key points to consider:
One Size Fits All (or Barely Anyone)
Even some of the better decks we’ve come across all suffered from a similar problem: they were either too broad in their pitch or incredibly narrow. Both impulses make sense, but neither will help you accomplish your goal of finding funding.
Some founders cast a wide net in an effort to appeal to as many people as possible. That’s understandable, but it has the effect of watering down the pitch to the point of being underwhelming. If the opportunity to invest in your start-up is “perfect for everyone,” then it’s not good for anyone.
In a reflexive move to avoid that, other founders have a hard time letting go of who they believe their ideal investor is. Whether it’s someone who shares their background or understands the intricacies of their industry, it may be hard to imagine that someone who doesn’t fit this persona would be interested.
The same struggle exists for founders who fall into either of these categories: pitch decks aren’t designed to craft your company story or present it in an engaging or compelling format. A deck is just a deck, and it’s only as good as what it includes and how it’s delivered.
The Need to Follow Up With Investors
The second reason pitch decks are all but guaranteed to fail is because they don’t provide an easy way to follow up with the people you shared your pitch with. Again, they aren’t designed to, and you’ll need to create some other workflow to list, sort, and transition your prospects through each stage of the investment process.
At this stage of your start-up, pitching to prospective investors is only one aspect of your job. Whether you’re still working for someone else until you secure funding or nearly all of your available hours are being spent on product research and development, you need a simple process for keeping up with who you’ve reached out to, what the outcome was, and how to get back in touch.
As a founder, you also want to present a professional image when you communicate with your audience of prospective investors. When you’ve made a pitch and promised to follow up with some bit of requested information, nothing looks as unorganized as missing a deadline or worse, forgetting altogether.
If pitching was the only thing on your calendar, then maybe this wouldn’t be so challenging. Instead, it seems to sink more meetings than it doesn’t. Pitch decks have plenty of limitations, but this one might hurt the most.
What You Can Do to Avoid It
That’s the goal, right? After learning why your pitch deck is failing, as well as why a pitch deck’s own limitations pretty much guarantee that outcome, wanting to know how you can avoid a similar fate is fair – and smart. Here are three easy steps to help put your pitch and your start-up on the right track:
It’s Starts With a Story
Here’s a hard truth: as much as you love your idea, investors are far more interested in the story you tell them about your idea. Because of that, your pitch should be designed to engage investors around your company story – and determining what that is can be hard to do by yourself. As serial entrepreneurs, the founders of The Main Stage experienced this dilemma time over time and knew there had to be a way to bring the fundraising process into the digital and virtual era.
At The Main Stage, our Story Vault™ software helps founders bring their stories to life. From visually appealing content to video highlights, you’ll be able to create dynamic, highly engaging, content that allows investors to understand what you do, get excited about the opportunity, and make the decision to get on board. Raising money for your start-up has never been easier or more exciting – and this is true for founders and prospective investors alike.
It Grows Through a Workflow
Unless you’re committed to building and maintaining your own database, having an easy way to keep up with your growing network of investors is quickly going to become a full-time job. Can you go it alone? Of course, but the risk outweighs the reward and it’s not even close.
That’s one of the reasons why our proprietary CRM system is such a powerhouse. With advanced analytics, you’ll know who’s reviewed your pitch, whether or not they were interested, and how you can follow up with them personally. When you need to maintain compliance, deliver tailored communication, and cultivate credibility, our CRM software has you covered.
It Thrives Over Time
Although you’re sure to have some one-time interest, the start-ups that succeed are the ones who partner with investors for the long term. To build those relationships, you’re going to need a trustworthy system that goes the distance.
The Main Stage’s Data Vault is an investor dashboard and secure document storage central location rolled into one. Once an investment is made, your shareholders will have access to their mutually executed documents and you’ll have everything you need to thrive. It’s that easy.
If you’re ready to get started we’re eager to help. Press the home button above to learn more or start your free 14-day trial. The future of fundraising is here – only at The Main Stage.
Brian A. Smith is a highly experienced investor, Founder of The Main Stage, and Co-Founder and CEO of RedCrow™ Inc., a direct investment and marketing platform that specializes in cutting-edge healthcare startups. Connect with him on LinkedIn and Twitter.