pitch

5 Terms That are Killing Your Startup’s Pitch

Latest posts by Ash Rust (see all)

Whether you’re (virtually) presenting before a group of investors or meeting an angel investor one-on-one via Zoom, the words you use to explain your company and your strategy are critical to securing funding. While the content of your presentation itself is essential, even the best business ideas can be derailed by poor word choice or etiquette.

Investors aren’t usually looking for a quick win or an opportunity to take advantage of a short-term loophole. They’re looking for companies that will define an entire category (i.e., Google and search engines, Facebook and social media, Salesforce and customer relationship management). And your word choice reveals a lot about both your approach to entrepreneurship and your potential as a partner.


StartupNation exclusive discounts and savings on Dell products and accessories: Learn more here

Adopt the right mindset

Investors are looking for founders who are unreasonably ambitious. A lot of founders make the mistake of attacking the progress or intelligence of their competitors. This doesn’t look good. Instead of attacking another company’s strategy, focus on why your company is resilient.

No matter how comfortable you feel with an investor, always remember that meetings are a professional setting, and basic etiquette is required. When you get in front of a potential investor, demonstrate that you value his or her time. Be confident in your plan but remain humble. You are asking for money, after all.



Use the right language

If you have a positive attitude and demonstrate a credible vision, you’ve already got a leg up on most of the competition. But there are some words you need to remove from your vocabulary if you want your pitch to generate investment.

Here are a few of the terms you should avoid:

Acquisition

Investors want an initial public offering, not a quick acquisition. If you highlight an acquisition as a positive in your pitch, you may hurt your chances. To appeal to investors, pitch your business as an investment opportunity with IPO potential, not a quick a win.

Disruptive (and other similar buzzwords)

Using buzzwords to explain your plan or product is off-putting to most investors. If you toss around words like “disruptive,” “visionary” and “innovative,” they’ll suspect you’re using them disingenuously. Many founders before you have used the same buzzwords in their pitches and failed to back them up with details. Most investors rely on pattern matching, so your buzzword use is a bad indicator.

Solo founder

Building a company is tough, but it’s 10 times harder if you try to do it alone. Not that it’s impossible, of course. Stitch Fix had a messy beginning, but CEO Katrina Lake has largely led the company to IPO by herself. Nevertheless, investors usually like to see a strong set of co-founders and team members who can support each other through all the ups and downs of business.

Channel sales

If somebody else controls the relationship with your customer, and thus the revenue, you should expect to pay a heavy tax. The Apple app store, for example, takes a whopping 30 percent cut of all in-app purchases. Even though channel partners can help with distribution, investors don’t like the chunk of revenue they take.

Plus, as you scale, your channel partner will probably try to compete with you (i.e., Spotify and Apple Music). That’s not to say channel sales can’t be done. For example, Supercell built a nine-figure mobile game business through app stores, but this approach can scare off many investors. They would rather you build direct connections with your customers and own the relationships yourself.

Regulated markets

Investors want customers to be able to purchase your offerings rapidly and without legal constraints so that you can scale across your market. If your target customer has burdensome compliance requirements when choosing vendors (e.g., requests for proposals for local governments), or if your product itself must comply with challenging regulations (e.g., HIPAA in U.S. healthcare), then you should expect your sales to take months, not weeks, to close. This makes you less attractive to investors.

Yes, some companies make money in regulated markets, but it’s extremely challenging to win over investors with a business plan that involves navigating extensive regulation.


Sign Up: Receive the StartupNation newsletter!

Conclusion

Pitching tips and tricks are a dime a dozen, but don’t forget to focus on word choice when pitching your business. Use the right language to your advantage, and you can craft a sincere pitch that excites potential investors.

Total
42
Shares
Previous Article
cyber savings event

Dell's Cyber Savings Event Starts Now!

Next Article
linktree

Bootstrapped and Global from Day One: The Story of Linktree

Related Posts
bankable
Read More

How To Make Your Startup Bankable

You’ve probably heard it countless times: “If you fail to plan, you plan to fail.” While it’s always a great idea to think about your long-term personal goals, this adage is even more applicable if you’re venturing into entrepreneurship. Smart planning can go a long way in making your startup bankable. The U.S. Bureau of...
wjr business beat
Read More

WJR Business Beat: Shopify Jump-Starts Starting A Business (Episode 328)

On today's Business Beat, Jeff talks about Shopify, a one-stop shop of resources for people who want to start a business. Tune in to the Business Beat, below, to learn how this subscription-based software can help you set up an online store and sell your products.   Tune in to News/Talk 760 AM WJR weekday...
startup success
Read More

How to Achieve Startup Success from Day 1

The decision to take the leap into starting your own business is never an easy one, regardless of your experience or industry. But as venture capital (VC) firms grow, with the average seed deal growing from $1.7 million to $4.6 million in the last decade, more and more people are breaking into the startup ecosystem....
second-time startup founders
Read More

5 Real Advantages for Second-Time Startup Founders

As a first-time founder, starting a startup is incredibly difficult. Raising capital, finding product-market fit and acquiring customers isn’t easy. As a second-time founder,  it is a bit easier.  After our first company was acquired, I knew that I wanted to start another company. Working for yourself, especially during the earliest days of founding at...