A pitch deck is a presentation entrepreneurs use to showcase their business and product, entice investors, and secure funding to take their business to the next level.
A pitch deck is needed when introducing your business idea (if you’re just starting) or your final product or service to a group of investors.
When pitching your business, here are things to NEVER tell Investors in each part of your pitch deck.
2 Things NOT to Say in the Introduction
The introduction is where you briefly introduce yourself before presenting your business idea, product, or service. It must seize the investors’ attention to why your startup would be a good investment.
“Before We Start, Please Sign this NDA.”
Entrepreneurs would love to protect their ideas and prevent others from stealing them.
However, for seasoned investors, there is no such thing as an original idea. They may have seen the same thing before, or they will in the future. Signing an NDA prevents them from funding similar ideas from other entrepreneurs if they choose to.
For investors, NDAs also give an impression that the entrepreneur lacks trust in their company team. Entrepreneurs banking on their idea alone tell investors of their lack of faith in their team’s ability to make it happen.
Signing an NDA is only valid upon doing due diligence on specific intellectual property and not before a pitch.
“We’re Still Trying to Find Our Unique Selling Proposition.”
The introduction segment of your pitch deck is where you grab attention by saying your unique selling proposition (USP). What makes your team, product, or process stand out? If you don’t have a USP, investors will find fewer reasons to invest in you.
3 Things NOT to Say When Presenting the Problem and Solution
In the pitch deck, the problem is the target customer or client’s needs. Then, the entrepreneur presents their business idea, product, or service as the best solution. Here are statements never to say to investors.
“We Haven’t Interviewed Potential Clients Yet.”
Some entrepreneurs are so excited about their ideas that they don’t do their homework. They assume there is already a real-world demand without validating it.
“With this Product, It’s Now Possible (But Not Really).”
Some entrepreneurs oversell their business ideas, products, or services to raise funds. Unfortunately, overselling reduces trust in investors once they discover its actual features and limitations.
Transparency is essential in building trust and credibility with investors. Show social or scientific proof behind every feature to avoid overpromising or making unrealistic claims.
“We Offer a Better Solution at a Lower Price.”
Underpricing the competition can have a less-than-stellar impact on investors.
It can show the entrepreneur’s lack of awareness of their product or service’s manufacturing, operational, and distribution costs. It can also demonstrate they lack confidence in their startup and are compelled to lower its price to gain another advantage.
However, if sustainability is one of its advantages, you’ll need to back it up with numbers of why it has fewer costs without sacrificing quality.
What NOT to Say When Explaining Market Demand, Trends, and Opportunities
After presenting the problem and how your business can solve it, the next section of your pitch deck must show market demand and how the timing is now more than ever.
“We Only Need to Get X percent of Market Demand.”
There are two reasons why you should never say this to investors despite how efficient it sounds. First, investors look for growth. They will always want to invest in businesses that can scale and capture a vast market demand.
Second, while market demand can be enormous in any industry, saying they only need “this many customers” to succeed shows vague targeting of their ideal client or customer.
Instead of saying, “We only need to get X percent of market demand,” focus on the startup’s Serviceable Obtainable Market (SOM) and Serviceable Addressable Market (SAM). SOM is the market size a business can realistically capture within six months. SAM is the market population willing to pay for the business product or service.
2 Things NOT to Say During Business Comparison
The next step of your pitch deck is to show your competition. Some entrepreneurs, driven by their ideas, can mistake that they have no competition. Here are things not to say when your product is compared to competitors.
“Because Our Idea is Unique, We Have No Competition.”
One idea can be used to solve a problem in one angle. But it doesn’t mean they have no competitors. For investors, having no competition means that the market has yet to develop, the business idea is not viable, or the entrepreneur didn’t do their homework.
“Neither My Company, My Team, nor My Product or Service Has Any Disadvantages.”
It is essential to mention the strengths and USP of the startup. However, claiming that the business is “fool-proof” or has zero disadvantages is unrealistic. Either the entrepreneur is unaware and therefore uninformed, or they’re not being honest with the investors or themselves.
Acknowledging the disadvantages or weaknesses of the business is a strength. By facing these shortcomings, measures can be taken to resolve or overcome them.
3 Things NOT to Say When Presenting the Team.
Introducing your team to your investors shows that brilliant and experienced minds are working to make your startup successful. Here are statements to avoid when introducing them.
“I Met My CTO / CMO/ CFO Months Ago.”
Startup C-level executives who have been friends for a long time are more guaranteed to collaborate and commit than those who have only been friends for less than a year.
Steve Wozniak met Steve Jobs during college, and five years later, they founded Apple Inc. As one Apple employee mentioned, Wozniak was the innovator, and Jobs did the marketing.
Another group of friends who made a successful business together are the founders of Airbnb. Nathan Blecharczyk became roommates with Joe Gebbia and then with Brian Chesky. Together, they worked in the same industry in their early years and later built a website to rent out space in people’s apartments.
“My CTO / CMO/ CFO will Officially be on Board Once We Have the Funds.”
Investors want to see that the essential people in the startup are committed to the business. Suppose any C-level executives will only enter the startup once it is financially secure. In that case, it gives the impression that they see the business as a job rather than a vision they are driven about.
What NOT to Say When Showing Business Traction
Investors may ask questions about what the company has accomplished up to the present. The entrepreneur can focus on their startup’s potential if the company has yet to gain traction. Here is what to avoid when emphasizing business potential.
“This Idea is so Big, It Won’t Fail.”
According to the Bureau of Labor data, one in five US businesses fail in their first year. Investors know this. They know you cannot guarantee them a 100% win.
That is why when entrepreneur confidently says their idea is too big to fail, it only shows ignorance and overconfidence.
Investors want verifiable figures of why your solution is the best for a scalable number of target customers and clients. They are looking for an entrepreneur with a capable team ready to learn and improve their business whenever they face setbacks.
4 Things to AVOID When Discussing Financials
In a pitch deck, the financials section shows the startup’s business goals and financial projections. It shows the CFO’s forecast of future revenue and expenses. This is where an entrepreneur would explain how much they would need to raise and why.
“Our Computations are Conservative.”
When investors look at a pitch deck’s financial projections, they’re not looking at how big the numbers are. They’re focusing on the entrepreneur’s thought process and how they came to those computations. If the entrepreneur has done their research, they earn the investors’ trust that their investments are in capable hands.
“My Time IS the Money I Raised for this Startup.”
Before investing, some investors may inquire how much money the entrepreneur has raised for their startup. While entrepreneurs have put labor hours into their startup, what investors actually want to know is if it’s already funded. Funded startups already have stable foundations, meaning their investment can play the role of bringing ROI earlier.
“Your X percent ROI is Guaranteed.”
Entrepreneurs risk a lawsuit if they guarantee specifics to investors. ROIs are their short-term goals for investors. Their end goal is to have highly profitable exits to move on to more projects.
“My Exit Strategy is Still in the Process.”
Exit strategies navigate the startup’s direction toward increasing value. If an entrepreneur hasn’t formed an exit strategy yet, it can demonstrate to investors that their offer may not be as significant as they present it.
“Then We Make a Quick Exit.”
At the same time, if investors find out an entrepreneur is planning a quick exit, they can perceive the startup as an investment risk. While investors prefer having an earlier-than-later exit for themselves, they find founders who build large and lasting businesses more reliable to invest in.
What NOT to Say in Sales and Marketing Strategies
Once the financials have been presented in the pitch deck, investors want to know the entrepreneur’s strategies to achieve the startup’s business goals.
“We’ll Go Viral.” / “The Final Product Will Drive Customers to It.”
Viral content is often the result of luck and coincidence. Saying that the business will go viral shows a lack of preparation on the entrepreneur’s end. This expectation is similar to how some entrepreneurs assume customers to find the product independently for being a superior solution to their competitors.
Marketing is needed to increase product or service awareness. It also helps retarget existing customers to buy again and recommend the business to others.
“Our Startup will be a Product-Led Growth Model.”
The product-led growth (PLD) model is one of the good strategies for encouraging clients or customers to try it first. They can subscribe to a premium product or service when they find value in using it. However, a startup must depend on more than the PLG model. Advertisements and other marketing strategies are still crucial for its success.
How Not to Close Your Pitch Deck
This is where the entrepreneur summarizes the entire presentation and gives a closing statement. It is also the part where they will do a call to action for the investors to invest. Here are common mistakes to avoid when concluding your pitch deck.
“Now’s Your Chance to be the Early Bird to this Opportunity.” / “We Have Garnered Massive Interest from Other Investors.”
Investors dislike being rushed, especially if it’s a fake sense of urgency. They prefer to wait for a startup to have fewer risks. Investing in it is safer if the startup has grown and achieved more milestones within six months or more.
“Larger Companies are Waiting to Partner with Us.”
The keyword here is “waiting” -meaning it hasn’t happened yet. Investors would prefer more certainty in what they are investing in. They are more willing to be on board if said companies have already partnered with them.
“We Need Good Salary Support.”
Investors fund expansion, research, and development. They will fund office rent, PCs, software, and other equipment. They do not invest in the founder’s salaries or the startup’s team.
“We Just Need the Money.”
The reason why investors invest in startups is because they have a background in the industry. Some may also wish to contribute with their expertise when investing in a startup. If the entrepreneur only needed the money, not their feedback or skills, they risk alienating the investors.
Conclusion: Investors Want to Know that the Entrepreneur is Reliable and the Startup is Sound
Trust is vital between investors and entrepreneurs. It can be established during the pitch deck.
Investors know the risk of businesses failing most of the time in the first year of operation. But they still look for signs that the founders are transparent, have taken measures to increase their success, and have done the work to prove that the startup is viable.
To know which investors are right for you and what they are looking for, see our “4 Steps to Get Investors for a Startup.”
