Funding – Pitch Top 6 Mistakes, Key Metrics

As an entrepreneur seeking funding, creating a pitch is one of the most crucial steps in the process. The pitch should showcase your company’s business model, market opportunity, and financial projections. It’s your chance to convince investors that your company is worth their time and money. But with so much riding on your pitch deck, it’s important to avoid common mistakes that could cost you the opportunity for funding.

Here are the top six mistakes to avoid when creating your pitch

1. Lack of focus
   Your pitch deck should be concise and to the point, focusing on the most important aspects of your business. Avoid going into too much detail or including irrelevant information. Stick to the key elements that investors want to see, such as your business model, target market, competition, and financial projections. According to a survey by Fundable, 81% of investors want to see a clear, concise business plan with a focus on the market opportunity, competitive advantage, and financial projections.
2. Poor visual design
   Investors are more likely to remember a well-designed pitch deck that is easy to follow and understand. Use visual aids like graphs, charts, and images to help illustrate your points. Make sure the design is professional and consistent throughout the deck. According to a study by SurveyMonkey, 67% of people are visual learners, so incorporating visuals into your pitch deck can help increase engagement and retention.
3. Overemphasizing the product
   While your product is important, it’s not the only thing investors are interested in. Make sure to also focus on the market opportunity, the team behind the product, and the company’s financial projections. Investors want to know that you have a clear plan for growing your business and that it’s a sound investment opportunity. According to a survey by First Round Capital, 78% of investors said that the team behind the product was the most important factor when making investment decisions.
4. Ignoring the competition
   Investors want to see that you have a deep understanding of your market and competition. Make sure to include a thorough analysis of your competitors and how you plan to differentiate yourself from them. This will show investors that you have a clear understanding of the market and that you have a solid plan for success. According to a report by Forbes, investors want to see that you have a unique value proposition and that you understand the competitive landscape.
5. Emphasize the Team
   The team behind a company is often just as important as the product or business model. Investors want to see that you have a talented and dedicated team in place who can execute on your vision. Make sure to include brief bios of the key members of your team, highlighting their relevant experience and qualifications. Also, include a section on your company culture and why you believe your team is the right fit for your business.
6. Missing a Clear Ask and How You Plan to Apply the Funds
   Investors want to have a very clear idea of how much you are asking for and what round / stage you feel you are in terms of maturity of the business for the identified funding round. Just as important is a clear description of how you would apply the funds and their projected impact to the business. This is not a repeat of the business plan, but should align with the objectives.

Be Sure to Include the Right Financial Metrics

When it comes to financial projections, it’s important to include specific metrics that will help investors understand the potential of your business. Here are some key financial metrics to include in your pitch:

1. Revenue projections: A breakdown of your revenue projections, including how you plan to acquire and retain customers.
2. Gross margin: The difference between revenue and cost of goods sold. Investors will want to see that you have a clear understanding of your costs and that you have a plan for maximizing your margins.
3. Burn rate: The rate at which a company is spending its capital. Investors want to see that you have a clear plan for managing your finances and that you have enough capital to reach your milestones.
4. Customer acquisition cost (CAC): The cost of acquiring a new customer. This metric will help investors understand the scalability of your business and whether or not your customer acquisition strategy is sustainable.
5. Lifetime value (LTV) of a customer: The total amount of money a customer will spend on your product or service over their lifetime. This metric will help investors understand the potential value of each customer and the potential return on investment.

Creating a successful pitch is essential to securing funding for your business. Including these key financial metrics will help investors understand the potential of your business and make informed decisions about investing. By focusing on the team, financial projections, specific financial metrics, and avoiding these common mistakes, you’ll increase your chances of a successful pitch and securing the funding you need to grow your business.