As a founder, you probably know this: There are hundreds of good tips and advice on how to convince investors of your business idea and get an investment. However, our guest author and coach from the Hohle der Lowen, Felix Thonnessen, presents you today with his ultimate 5 tips that will definitely not get you funding. Ready? Well then go ahead.
#1 Definitely tell the investor only half the truth
I was recently asked the following question in a radio interview: How often do deals with investors happen? Of course ALWAYS! Well, okay, almost never, but that's not because the sums or the money are so small. the deals were not fair, but that the startups hid something from the investors. That is why it sometimes happens that an investor withdraws his offer.
But honestly, this is understandable, isn't it?? I wouldn't want to invest hundreds of thousands of Euros in a company just because the three-minute pitch was good and entertaining, but the business plans are simply bad or flawed. It's better to think twice about investing millions.
Investments always have something to do with trust and risk. So don't hide anything from your investor and let him know everything.
Sometimes an investor is the only way to breathe life into your idea. So please spare him the nasty surprises.
#2 It doesn't say what it says on the outside! – Adorn yourself with things you don't even have
As mentioned in the previous point, you should not hide anything from your investor, no matter how negative it is. You have to be honest and honesty includes the opposite of telling too little: Telling too much. Don't decorate yourself with great things that you or your idea don't own, just to get the investment. Let's do a little test so that you know how the investor feels when you add something to your idea or your CV as you please.
Imagine that you can finally buy your dream car, for example a fancy sports car. The ad says what great extras the car has and what top condition it is in. The offer appeals to you and you buy the car. You drive to a far away village, where in a barn the said car is supposed to stand and the provider opens the gates for you. But there is only a completely dilapidated and dirty Fiat Multipla (a not really nice car). Not such a heady feeling, is it? This is how an investor must feel when he finds out later that some of the facts of his investment do not correspond to reality.
5 points that definitely discourage investors, explains Felix Thonnessen
#3 Do not burn for your idea
Only someone who burns for his cause can ignite the fire of others. For many investors this point is extremely important, because first and foremost they don't invest in the idea, but in the people who implement this idea. It makes little sense to work on an idea that you yourself are not convinced of! Even if the idea has potential, you will hardly convince anyone of it. After all, you don't try to inspire your friends to watch a lousy movie.
So if you're not on fire yourself, you can't light a fire in others either.
Not so difficult, is it??
#4 The key is to present an over-engineered pitch with maximally developed entrepreneurial skills
You want to come across as particularly intelligent and economically educated to the investor, then "learn easily" Memorize a few great Anglicisms of the startup scene and off you go. Many start-ups think exactly that and get bogged down in some foreign words from the vast expanses of the economy. Or they try to appear as international as possible and pave their sentence structure with anglicisms. Investors want to get to know you and your idea during the pitch and see that you are comfortable with what you do.
So don't bend yourself and shine with what you know and do, instead of acquiring anything on compulsion.
#5 When the crumb talks, the cake has a rest
Another very successful way to scare away the investor is not to let him speak at all. After all, it's your idea, so what's the investor to report? When pitching your idea to an investor, don't just try to go through your pitch and get the heck out of there as quickly as possible, but seek out conversation. Communicate with the investor and exchange ideas about different possibilities at length. The better the investor can get to know you, get his questions answered and get a more accurate picture of you and your idea, the higher the likelihood that an investment will be made.
These five behaviors are very common and all work flawlessly to not get an investment. But if you're wondering what you can do better, consider the following basic tips for attracting investment: Investors are not brutes and they are not your enemies. They are looking for investment opportunities and hope to invest their money wisely and as successfully as possible in order to increase their capital. So give investors the one thing they need to loosen up some of their capital: TRUST. If an investor is confident in the idea and in the founders, there is much less standing in the way of the investment.
Convince therefore not only rhetorical or content, but both ways equally and ignite the investor's fire.