Venture capitalists and angel investors often receive too many proposals from startups, but not all of them are worth funding. Below you can read the most common mistakes made by startups that don’t allow them to get business funding.
- Extremely Small Business Idea
Make sure to have a company that can grow and become meaningful. Your business idea should be presented in a proper way so to persuade an investor to invest in the next big thing.
- A Business Plan that Makes No Impression
Your executive summary or pitch deck should make an impression on your potential investor. Don’t write a lengthy business plan. Nobody will review that. If it’s a PowerPoint, 15 pages will be enough. If it’s an executive summary, a few pages will do.
- You Are Not Prepared to Answer All the Questions
Think through the questions investors will ask you beforehand.
- All You Have Is Just an Idea
Investors are looking for progress. You can’t just show a good idea. Show them any traction you’ve already gotten such as customer sales, traffic to your website, app downloads, and more.
- You Don’t Have a Smart Management Team
This doesn’t mean you should have a complete management team in the early stages of development. However, you should be able to prove you have a quality team.
- Don’t Have a Good Understanding of the Market
Research your market and be prepared to talk about the competition in your field. Don’t tell your potential investor your business has no competition in the market.
- You Are Unrealistic About Your Financial Projections
Avoid presenting unrealistic growth in revenue. Also, don’t present projections that are uninteresting to your potential investor. Beyond that, don’t require huge amounts from the very start.
- You Can’t Prove Your Product or Service Is Unique
You should convince your potential investor that customers need your product or service. How is your product different? What key feature does it have?
- You Don’t Know How to Get Customers
Show a well-thought strategy on how to acquire customers. Have a proper marketing plan. You can’t just tell the investor that customers will automatically come.
- You Can’t Properly Display Your Product or Service
You’d better show a working prototype or a professionally made video summarizing your product or service.
When looking for business funding, it’s important to turn to a reputable business loan provider like firstamericanmerchant.com. First American Merchant (FAM) is a reliable and secure payment processor that specializes in the high risk industry.
Just having an idea of how to start your business is not enough to get business funding. You should be well prepared to make your potential investor believe in your business. Avoid making mistakes and focus on growing.Get Started Now