When seeking funding for your startup, the way you communicate with investors can significantly impact your chances of success. Certain phrases, although commonly used, can inadvertently hinder your fundraising efforts. Here are five phrases that entrepreneurs should avoid when pitching to investors:
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“We can sell this company within five years.”
Promising a quick sale of your company may signal to investors that you lack commitment to long-term growth. Venture capitalists are typically looking for startups with the potential to achieve substantial scale and impact. Focusing on short-term exits may undermine confidence in your dedication to building a sustainable business.
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“We don’t have any competition.”
Claiming to have no competition can raise red flags for investors. In most markets, competition exists in some form, even if not immediately apparent. Acknowledging competitors and demonstrating how your solution offers unique value can strengthen your pitch and validate market demand for your product or service.
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“We need you to sign an NDA.”
Requesting a non-disclosure agreement (NDA) from investors is generally frowned upon in the startup world. Investors evaluate numerous opportunities and cannot sign NDAs due to the volume of pitches they receive. Instead, focus on articulating your unique value proposition and competitive advantages without relying on confidentiality agreements.
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“We just need money.”
Conveying a sense of urgency for funding without demonstrating existing momentum can deter investors. Investors prefer startups that exhibit traction and progress toward achieving key milestones independently. Present your company as a high-potential opportunity poised for accelerated growth with additional capital, rather than solely reliant on funding to initiate operations.
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“I don’t need a cofounder,” or “We just met a few months ago.”
Investors place significant emphasis on the strength and cohesion of the founding team. Dismissing the importance of a cofounder or revealing recent team formation may raise doubts about your ability to execute your business plan effectively. Emphasize the complementary skills and shared vision of your team members to instill confidence in your startup’s potential for success.
In summary, entrepreneurs should be mindful of the language they use when engaging with investors. Avoiding these common phrases can help maintain investor confidence and increase the likelihood of securing funding for your startup.
