This article is one in a series covering The Stack’s Spring Business Summit. Take your business to the next level with the help and advice of our business experts.
Business•17 June 2021
Five Mistakes You Won’t Want To Make During A Pitch
Boost your chances of getting the right investment by taking on board these top tips on what NOT to do when asking for funding
By Florence Robson
W
omen-owned businesses contribute £105 billion to the UK economy each year. Yet, just 2.8% of venture capital funding goes to women-led start-ups. In a biased system, how can women founders maximise their chances of getting their business funded?
As part of our Spring Business Summit, Sharmadean Reid, The Stack’s CEO and founder, hosted a panel to discuss the stumbling blocks to avoid. Speaking with Rachael Twumasi-Corson MD of Afrocenchix, Camilla Falkenberg co-founder of Female Invest, and Katherine Ireland, an experienced investor and adviser, they shared the pitch mistakes they often see (and have made themselves).
‘We often feel that we need to be experts in finance before we can go out and ask for money.’
1. Undervaluing your company
Camilla: “If you are pre-revenue or [at an] early stage, it can be difficult to decide where to set your valuation and what you can ask for. At the end of the day, what determines the value of your company is what the market is willing to pay for it. If you can really justify why your company is worth a certain amount; why you are qualified to make it happen; and why you and your team are the right people to execute it, then you will find the investors who are willing to pay the right price for it. Have the confidence to set the price a bit higher and be confident in asking for it.
Some of the feedback we had from early pitches we did was that we were too conservative. If we had asked for more money, we would have got it.”
Rachael: “An early valuation we came up with for Afrocenchix was £2 million – when we first mentioned it to an angel investor, they laughed at us. That knocked my confidence, but my business partner, Joycelyn, was steadfast: of course, it's worth £2 million, we work hard, our customers love it. That attitude was infectious. When you set your valuation, air it to people who back you and support you, who see your worth, and can tell you if it sounds reasonable or not. In the end, we did raise the £2 million in that round.”
2. Not asking for help outside your own network
Camilla: “As women, we often feel like we need to know every single detail – we need to be experts in finance and investor landscapes before we can go out and ask for money. But if you haven't raised funds before, how would you know? Reach out to founders you look up to – small or large – and even investors for advice and feedback on your pitch.
“At Female Invest, we reached out to 20 different people asking for 15 minutes of their time for feedback on our pitch or deck – and every single one got back to me. Everyone has been in that place. That’s one of the great things about the start-up ecosystem – people are so generous with their time and advice. Have something concrete you want advice on.”
3. Faffing with your laptop
Sharmadean: “When I'm about to pitch, I open my deck on my laptop and have any supporting windows I need already open. I turn the wi-fi off, then close my laptop, so the minute I open, my deck is ready to go. It’s slick and I am not flustering trying to open files when I am trying to talk to them. I also connect to my hotspot, so I don't even ask them for the wi-fi details. All of those little things can diminish their perception of your capability. I highly recommend that you make sure the technical and logistical delivery of your pitch is as smooth as possible.”
4. Not mentioning your team
Katherine: “Seeing the belief and the connection between a founder and what they're building is so critical, that gives you that innate confidence and ambition that investors are testing for. But as companies mature, one of the things that becomes important is that it’s not over-confidence in yourself. You need to be building a team around you. You want to see a founder who is creating a cohesive team around them, an actual business, not just a vision of themselves.”
5. Pitching to the wrong people
Sharmadean: “This is a really common mistake. Maybe they don't invest in your industry or don't invest in your seed round level. That was a mistake I made. Different funds operate at different cheque sizes. Fully do your research to ensure that the person you're in front of is right for you. Go on Crunchbase – see if they have invested in similar companies and what stage do they invest in? Investors will always take a meeting – that’s their job – so root out the ones you’ve got the best chance of success with.”
This article was taken from a live membership workshop. You can access the full, hour-long recording, and much more, on demand when you sign up to become a member.
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Lead image by agefotostock / Alamy Stock Photo
The Short Stack
Be ambitious in your valuation; get feedback on your deck; and make sure your delivery is super-slick.
By Florence Robson
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