Your team may be the most important element in an investor’s evaluation of you. After all, they are giving you the money…can you make it happen? There are many common mistakes I have seen over the years with a management team. Here are a few:
- Friends and family – Surrounding yourself with friends and family rather than talent and skills
- Texperts – Having only technology experts and no business members on your team. Technically not a pitch mistake, but refer to letter “d” below.
- Pretty pictures – A pet peeve of mine. Don’t show me a bunch of pictures, a few names or titles and say,” We’ve got a great team.” Why should I believe you?
- Significant gaps – If there are significant gaps, tell investors how you will be addressing these
- Lack of domain experience within the team –Too often teams do not include someone steeped in knowledge of the segment within which the business will be operating. This often increases the risk of making an investment beyond an acceptable level.
Little or No Roadmap
I have heard from many investors that early stage entrepreneurs fail to answer the question “How?” This shows up heavily in the ‘go to market’ slide (or section of a business plan). This is similar to “Team shortfalls” above and this takes many forms. Here are a few:
- Social media – This is another pet peeve of mine- A plan that says we will use social media and reflects skyrocketing sales with diminishing marketing spending by relying solely on “free” social media.
- Distributors – You state you will use distributors. What type? How will they be managed? Have you researched the market? Why would they work with you? What are the costs and implications to pricing/profit?
- “Someone else created that” – Nothing kills a CEO’s credibility like not being able to speak to a plan or numbers because “someone else created that.” It is great that you have talented team members and you can involve them during a pitch (especially in Q&A and networking), but investors expect a CEO to be informed enough to speak on topics.
- Shallowness – This is probably the most common issue I see. Yes, this is a pitch and you only have about 60-90 seconds to talk about ‘go to market’. But too often it is evident that there is no ‘How’ behind the ‘How.’ The pitch needs to convey thoughtfulness and strategy as elements of your ‘go to market’ plan.
A special thank you to Alan Lobock for his input on this article. Tom Fulcher is the President and founder of The Idea Gardener LLC and has over 25 years of management experience with start-ups, small businesses and Fortune 500 companies. Tom is the Entrepreneur-In-Residence for the Chandler Innovations Incubator and teaches the NACET Pitch Power series.