Home Why Investors Reject Your Startup Pitch

Why Investors Reject Your Startup Pitch

Why didn’t he call? You dressed to impress, you were witty and intelligent, but still the phone isn’t ringing.

When you think you’ve made the perfect pitch to an investor (Yes, an investor. What did you think we were talking about?) and shockingly, the person leaves you hanging without a clue why you’ve been rejected, what do you do next?

Most likely, it’s time to rethink and refine your pitch.

To get a definitive answer, I talked to Brent Beshore, CEO and founder of investment company AdVentures, who advises entrepreneurs “to be as clear and ‘meaty’ as possible.” And he’d prefer, if possible, you say it all in one sentence.

“I hear pitches that start with ‘Well, we’re like a cross between Twitter and Facebook that utilizes some aspects of Groupon,'” says Beshore. “That’s worthless. An elevator pitch should be very concise and very direct.”

Here are some examples of what he means:

  • “We buy failed magazines.”
  • “We enhance company culture through fitness.”
  • “We sell bathtubs online.”

Now think about your elevator pitch. Ask yourself these four questions:

1. Was your pitch confusing or nonsensical?
Sometimes you can be so enthusiastic about your business ideas or so nervous about making the pitch that you end up running at the mouth or throwing in too many details.

2. Did the investor see the need?
Did you spell out why your target group of consumers will see the need to buy your products or use your services?

3. Did you emphasize points of differentiation?
Maybe the investor wasn’t convinced your idea is innovative or different enough to distinguish it from the millions of other businesses out there.

4. Did you talk up your team?
Investors want to know you have the right people with the right skills to make it happen.

Now that you know what investors are looking for, rework your pitch. And practice pitching to people unfamiliar with your industry to see if they understand what you have to offer.

Then try again. And again.

If you still can’t get traction for your idea, it may be time to rethink not just your pitch, but your business ideas. If your pitch is perfect but still isn’t working, the problem could go beyond your delivery to the actual fundamentals of your business idea. Take another look at the four questions above and make sure your business idea is clear, that it really does fill a need, that it really is different from competitors, and that your team really does have the chops to execute your plans.

Photo courtesy of Shutterstock.

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