How to Deliver a Bulls*** Free Pitch
Before you can deliver a bulls*** free pitch, you must know what red flags to avoid. There are several instant indicators that will immediately cause you to lose credibility with investors and prospective customers. Let’s go over them.
Red Flag 1: Exaggerating the problem
Founders tend to inflate the size of the problem they’re addressing, often without substantial evidence. Frame your problem better by drawing from personal experience or highlighting why you’re motivated to solve it. Avoid using buzzwords or sounding generic. This will only make it harder for your listeners to differentiate you from the competition.
Red Flag 2: Mistaking prospects for paying customers
Many pitch decks we see include a slide with a list of big-name logos. When we see those logos, we assume they represent paying customers. In reality, they may signify sales discussions or unconverted pilots. Be honest and clear about who your customers are. You can keep the logos of companies in your sales pipeline, just mark what stage they’re at. List your customers and prospects separately. Later on in your deck, make sure your pipeline supports your revenue projections.
Red Flag 3: Inflating Traction
Sometimes founders use specific tactics a few months before they’re pitching to inflate numbers. Don’t do that. Instead, disclose all critical data points. Make sure you get your company’s story across. Don’t show the best story, show your story. Steve Barsh, Managing Partner at Dreamit, remembers one founder who told him they get 30 referrals from every customer. When asked if this characterizes the average customer relationship, it turned out to be an outlier with the actual average number of referrals at 3-4. This is not a bad stat, yet the founder immediately lost credibility trying to skew it.
Red Flag 4: Miscalculating TAM
Many founders use a top-down approach to calculate their Total Addressable Market (TAM). Top-down TAM relies on many assumptions that investors know will not come to fruition. Learn how to properly calculate TAM in the Dreamit Dose below.
Red Flag 5: Misleading Full Team Slide
When we see the typical full team slide, showcasing the smiling faces of people who went to great schools with good pedigrees, our assumption is that all of these people are full time. If they’re not, be sure to make this clear and avoid the problem by simply labeling your team accurately.
When you’re pitching, you don’t want to come across as insincere, untrustworthy, or deceptive. Before you pitch, comb through your deck and identify the red flags.
Don’t overstate the problem
Be honest about your pipeline
Disclose critical data points
Clearly label your “logo wall” slide
Calculate TAM properly
Label team accurately
Show metrics that have substance. You wouldn’t have started your company if it didn’t provide value. Your investors want to get true value out of the company, while customers want to get true value out of your product. Conveying the value you can actually deliver upon is what matters. Investors and customers want to engage in a candid dialogue with you and hear your story, not an embellished version of it.
By Alana Hill, Securetech Associate at Dreamit Ventures
Subscribe to Dreamit’s Podcast on Apple, Google Podcasts, or Spotify
