Entrepreneurs are naturally enthusiastic about their venture and breakthrough product. About its potential, and how it’s going to affect people’s lives. But what interests and inspires investors is the business and its value, the combination and synergy between an idea and a robust business model.
Investors know that even a game-changer product and an exceptional team cannot guarantee a venture’s success. Success is made of, and subject to, pinpointing timing and identifying the opportunity. These, therefore, must be mentioned in your deck.
Too large or irrelevant markets
If, for instance, your product is an innovative soft drink can, there’s no point in talking about the whole beverage market. Your primary market is the beverage can market. Similarly, if you have invented a laundry-folding machine (recently, I have come across one!), your market is the same as the washing machine market, not the entire household goods sector.
You can mention (in fact, I recommend), that in the future it will be possible and viable to annex additional market segments, but they’re not your immediate target.
Too long and unfocused presentations
The deck or presentation should provide answers to ten questions. Each slide answers one question:
Why?– the background
What? – the venture
Who? – the team
For whom? – the market
How much?– the business model
Who else?– the competition
What’s your need?– the desired investment, and for what
When? – timeline and milestones
How? – marketing
What’s in it for me?– me being the investor, of course
Investors want to know and see that entrepreneurs have undergone a business development process; that they are aware of all dimensions of their venture. You don’t have to know all the answers, but you do have to talk about the weaknesses and issues that have yet to be fully addressed, discussed, analyzed, or understood (one way to do this is to use the SWOT analysis and elaborate on it). Don’t ignore the competition even if you think you don’t have one. If your in-depth market research is not yet complete, say so up front. The same goes for the business plan, and similarly for open questions, and unsolved problems. You want your potential and future investors to understand that your idea is not only bright, but also that you know what you’re talking about, that you’re very serious about your business, and that you know it inside out.