TIM ARMOO: These are the commonest pitching errors

Everyone and their dog has a business idea: ‘It’s the app for this’ or ‘It’s like Uber, but for this’ – you get the drill.

But no matter how great the idea is, many people still fail at pitching their idea correctly, especially when talking to investors.

The truth is, most entrepreneurs have no idea how to pitch their company well, so the idea is dead before it even begins.

I’ve invested in 19 companies but have heard my fair share of dreadful pitches.

I have also launched five start-ups and sold two, so I’ve done my fair share of pitching.

To help combat the bad-pitching epidemic, I’ve outlined 10 common pitching mistakes and how to fix them.

1. The pitch is too wordy

Usually, investors don’t have much time, and they definitely don’t have time for terribly pitched ideas. 

So, if your pitch is a convoluted mess of buzzwords and unclear jargon, the investor will switch off. Quickly.

To give you some context, the average investor spends just 2 minutes and 40 seconds looking at a pitch deck.

Assume it’s less than that. Some of these investors are slow readers.

How to fix the mistake

Keep your deck short and succinct. Twelve slides is a good amount, and don’t cram tons of information in.

Make sure you include only the most important bullet points, such as growth levels, financial information, what problem you solve, and how you’re solving it.

Don’t spend five slides telling the investor how great the team is. They don’t care THAT much. They just want to know if the idea is good and whether you have a plan to/have been executing it well.

A bonus is using more pictures than words. Remember, time is your enemy.

2. Saying you have no competition

There’s a simple rule for this: If you have no competition, it’s because there’s no market for your product.

Provided you’re not making crazy ideas like parking sensors for dogs, (that’s a real idea I read about a few years ago), then you will have competition. Every business has competition.

Sometimes the competition is well funded, sometimes it’s lacklustre and doing nothing.

But don’t say you have no competition – it makes you look amateurish and disingenuous.

How to fix the mistake

Make note of the competition, call them out in your pitch deck, and give 1-2 sentences about how you fare against them.

What are your advantages? Where do they hold an advantage? How are you going to protect your advantage against them?

Be honest and tactical. It’s your best bet.

3. Not acknowledging the competition

The other side of the competition discussion is where people say how competitors do everything wrong and you do everything right.

This is just as bad as saying you have no competition.

When you say, ‘All the competition suck, we’re SOOOOOO much better’ shows naivety. It makes you sound flippant and disregarding the business that may beat you.

It’s not a good look when you’re pitching to someone who you’re asking to invest thousands or millions of pounds.

How to fix the mistake

Point out where the competition is good, and where the competition is bad.

Give specific examples of how you can mitigate their advantages and exploit their weaknesses.

Prove to the investor you have a concrete plan to beat them, don’t just ignore them.

4. No mention of how you’ll acquire customers

A lot of decks I see just speak in very general times about getting customers.

Just saying ‘We’ll use social media’ or ‘Word of mouth’ is a bad way to explain your customer acquisition channels because it sounds like you haven’t thought about it.

How are you going to use social media? Are you running ads? Are you partnering with influencers? Be specific.

How to fix the mistake

A better way to do this would be to pick 2-3 specific channels you’re going to use and show that you have tested these already and can show results.

For example: ‘We’re going to partner with influencers to promote this jacket. So far we partnered with 5 different creators and drove 100 sales already. 

Considering we spent £500 to run these promotions, it’s very profitable as it costs us £5 to acquire customers but we charge £20 for the jacket.’

5. Show some traction

You will have a far greater likelihood of raising money if you have shown some progress already.

Too many entrepreneurs come with hope and prayer and that then relies on whether the investor likes you.

The amount of traction you can show is directly linked to a decrease in risk.

In other words, the more progress you show, the less risky the investment seems and the more likely they’ll invest in you.

How to fix the mistake

Get some early customers before you raise money. If you can’t do that, get letters of intent from people saying if you build the product they will pay for or buy the product.

Showing actual customer usage is a KILLER when raising money. You raise more money, on better terms, from better investors.

Always show traction.

6. Weird Maths

A tried and failed thing people do a lot is top-down market analysis.

Things like: ‘The market is 100 billion, if we only capture 1 per cent of the market then we’re a billion dollar company.’

This comes across as quite lazy and doesn’t reflect well on you as an entrepreneur. It’s very wishful thinking and doesn’t hold much substance.

How to fix the mistake

Be truthful and realistic about your maths. Give realistic projections for each year and explain how you’re going to get to the next stage.

Yes, the projections are just projections, but showing the investor that you have a clear thought process behind how you came to that conclusion is way better than just taking a lazy and generalised estimate.

Justification is way more important than you realise.

7. Unrealistic projections

A lot of founders mess up their pitch by having unrealistic projections.

This is usually done in two ways:

• Saying their company is going to go on the stock market when there is no way it can

• Saying after year 4, they’ll be making a bazillion pounds.

This makes you seem amateur.

How to fix the mistake 

Go with a lower and more realistic projection.

Investors respect honesty and can now actually see the odds of success, instead of pie in the sky thinking and wishful billion-pound exits.

Realism is a very powerful tactic when used correctly.

8. Saying you’re for everyone

Facebook started as being for Ivy League kids and then expanded to other colleges. Ebay started out being for collectibles. Amazon started out just selling books.

You need to really focus on a niche.

A problem I see with a lot of pitch decks is that they don’t define very clearly who their ideal customer is. Instead, they say it’s for everyone, which is never true.

How to fix the mistake 

Choose a niche, then choose a niche within that niche. Become the market leader in this niche of a niche, then expand.

Momentum is an incredibly powerful phenomenon and it’s made much easier when you have a strong foothold in at least one market.

Think big. Act small.

9. Expecting prior knowledge

Don’t be too technical.

A lot of decks I see presume I know what they’re talking about by using a lot of technical jargon and acronyms.

You should assume the investor isn’t an expert and is completely clueless. Imagine you’re presenting this to an alien, or a 5 year old…or an alien 5 year old.

Make it so simple they can understand it.

How to fix the mistake

Explain the technical stuff in the Q&A.

Remember the point of the deck is to spark interest, it’s not to take the deal.

If the investor does understand the technicalities of the business, they will ask. If not, let the deck do the talking and wait for them to come back to you with technical questions.

10. Not practising your pitch

I am always shocked when founders pitch and their umming and aaahing their way through a pitch.

It makes you look like an amateur and, truthfully speaking, if you can’t nail a pitch about your company, how can anyone trust you to run it correctly?

The risk factor is increasing with every instance of amateur behaviour.

How to fix the mistake

You should practise your pitch that you know it like the back of your hand.

However don’t practise it word for word, rather make sure you know the main points for each slide.

Trust me, this will be good enough.

This might come across as basic but you’d be suprised how many don’t do this.

Now you have a better idea on how to pitch, come and pitch to me. I’m giving $10,000 and Macbooks to three people to fund their business ideas. 

If you think you have what it takes, check out the details here.