3 Experts Explain the Biggest Investment-Seeking Mistakes to Avoid

Local angel investors talk about some of the biggest investment-seeking mistakes they have seen and some tips on how to strengthen your pitch.

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To help you avoid big investment-seeking mistakes, I reached out to some local angel investors for their take on the mistakes they see entrepreneurs making and their advice for raising money.

Stephanie Andrew

Founding partner, Women’s Equity Lab; co-executive director, Capital Investment Network

> High valuations that are unjustified

> Using Simple Agreement for Future Equity (SAFE) unnecessarily

 

> Not taking time to build a relationship before expecting a financial commitment

> Backing down on promises once a deal closes

> Lack of transparency

> Financials with non-income items classified under revenue

> Being overly pushy at the wrong times e.g. in social situations

> A poor pitch presentation (sending someone junior to do a pitch)

> Being cranky/passive aggressive when an investor doesn’t respond fast enough

> Going after the wrong angels

Andrew Wilkinson

Founder/chair, MetaLab; co-founder, Dribbble; founder, Tiny, a company that starts, buys and invests in internet companies.

> Not having a plan for the money

Not having an MVP

> Having a silly valuation with nothing to back it up

 

Rasool Rayani

President, Heart Pharmacy; founder, Pomme Natural Markets; and advisor and investor in technology companies

Investor Talk

> Many prospective investors say yes until they say no.

> Until you have closed someone and have cash in the bank, you haven’t closed them.

> Many prospective investors say no until
they say yes.

> Polite persistence and regular updates that show traction, conviction and focus can shift perspectives over time. Be polite. Desist when asked. Be gracious.

This article is from the February/March 2019 issue of Douglas.