Being a tech journalist, I attend quite a lot of startup conferences and pitching competitions- those are good places to check out the latest trends, see some interesting ideas and spot company or two to put on my mental „To-Watch“ list. I’ve lost count of the pitches I’ve seen or heard, but I’ve also left those events with a fair share of do’s and dont’s and an ever growing list of mistakes startups tend to make while pitching. One of those mistakes is lying. Although lying should be a blatantly obvious thing to avoid, it’s a pitfall many less experienced startup founders jump into to leave a good impression– to seem less inexperienced, to make their team seem more holistic, or because they think their startup will seem more investable. It’s quite the opposite, really- your idea may seem good in theory, your business plan may be polished and your prototype cool, but like so many companies in the age of startups, somewhere along the way you will probably find yourself changing all of them or pivoting in a completely new direction to satisfy the market needs and wants. Your investors know that- they’ve seen it happen a thousand times and this is one of the many reasons and that’s why most of them tend to stress the importance of the team and founders who can deliver and make it in the business, rather than the idea per se. So what kind of a picture do you paint of yourself when you twist and bend the truth to fit your perfect pitch? Well, not an investable one, rest assured. So even if you’re tempted to incorporate one of these “white lies”, avoid them at all costs:
1. “We have no competition”
This is a really poplar one. I’m guessing that the rationale behind this goes something like “our solution is so hip and innovative and no one’s ever tried it yet”. That’s great, but it does not actually translate into “no competition”. There’s a good chance there’s a company with a similar solution, and even if it’s not, every single startup dealing with the same problem (albeit from a different angle) is actually your competition. Having competition is normal, it’s expected and the point of this part in your pitch is to show that you’re aware of it and know why your approach is better. Use your competition slide to show you’ve done your homework, and to show your edge, not to tell tall stories which make you seem unreliable and underprepared.
2. „The whole world is our market“
It’s not. You know it, I know it and whoever you are pitching to sure as hell knows it. Don’t put the number of all the smartphone users in the world as your market if you have an app. Let’s use an analogy here- it’s basically like you’re a watch salesman saying that every person with a wrist is your potential customer. Not everyone wants a watch, not everyone needs one, and there is a fair number of people who use their phones to tell the time (see the competition section above)-your target is that limited number of people who like and want wrist watches. The end. Rather than posting inflated and unrealistic numbers and childish assumptions, show that you can cater to the segment of the market you should really be aiming for.
3. We’re experts on everything. Ever.
Sure, being a bit of a Renaissance man helps somewhat in the startup business, but no one expects you to be an expert at absolutely everything, and boasting that you are is going to raise a few eyebrows. That’s why your team is important: I’m just going to go ahead and assume everyone is there for a reason and has intricate knowledge to do their part. You don’t all have to be forged in the field you’re covering with your startups, and good role distribution within a company shows that you know your own potentials and limits, and that you’re good at handling (human) resources. It’s the ability of your team to deliver that counts the most. Also, if don’t yet have certain talent you need in your team, but are looking for it, that’s a-ok too. You don’t necessarily need to incorporate that in your pitch, but there is no need to uncomfortably beat around the bush if the question arises. A good honest “We don’t have a developer/business development/marketing/whatever person yet, but we are actively looking for someone from that field who can contribute to the project and round our team“ is the best and it shows maturity. But don’t trust me, trust Carlos Espinal.
4. We don’t really need an investment.
I leave this jaw dropping but not uncommon gem for last. Sure you do, that’s why you’re pitching in front of investors. I can only assume it’s some silly macho bravado too cool for school reverse psychology trick you’re trying to pull off, but it’s not working. Just stop. Even if you’re bootstrapping and have good revenue, there’s a reason you’re pitching for investment: to help you grow (more rapidly), so you can focus more on other aspects of business, to hire new talent… You should know what you want to do with the investment and tell it like it is- like you have a plan. Which, assumingly, you do. Playing hard to get works on high school girls, not investors. Now that I got this out of my system, dear startupers, I really hope I never hear any of these lines from you again. When you’re pitching, keep your cool, be honest, do your homework and present with a good pitch deck. Good luck!