You may ask what happens to the startup pitches that get rejected every round investors go on an investment scouting mission; do they still go on to succeed?
To put the records straight,“[Each year] roughly 1,500 startups get funded by venture capitalists (investors) in the US, and 50,000 by angel investors. VCs look at around 400 companies for every one in which they invest; angels look at 40.” This is according to David Rose, founder of New York Angels and Gust. How best to move on from a failed pitch effort can never be over-whipped. Below, we examine the best ways to move on from a failed pitch effort.
Know The Questions And How To Respond To Them
- The biggest part of a pitching effort is usually the questions that come after pitch presentations. Pitching your deal is not the big deal, after all; you may have gone through some intensive rehearsals and researches before the pitch event. However, knowing what questions potential investors may ask you after the pitch is usually the big problem. If you aren’t prepared to answer these questions, the investors may quickly lose their interest in the whole deal.
- The essence of the questions is to help you discover your weaknesses. It is important you jot down those questions that they asked, so you may find use in them in making your pitch better the next time. Even if you pitch more and fail more, you will be able to continually optimize your pitch. This will prepare you more to make better pitches next time.
To learn more on how to ask the right questions during pitch events, click here.
Keep The Relationship After Your Failed Pitch
- Instead of discarding that relationship after your pitch has failed, try and keep them. A “no” today can be a “yes” a year from now. Keep the relationship alive by keeping in touch with investors through e-mail. If possible send a mail thanking them for their time and consideration.
- Sometimes, it may be good to ask for feedback from the investors. You may casually do so if you are still keeping the relationship and you get a chance to meet them again. You may even email them and politely ask if they can give you a few hints on how best your pitch can be improved. However, do not expect any replies, since most of them have a lot to contend with already, but a few replies may come which can be extremely helpful when pitching again in the future.
Minimize How Often You Pitch Your Business To The Wrong Investors
- Pitching will allow you to study the type of audience you are dealing with. When going into any investor meeting, use the chance to study what type of investors that you are dealing with and know which type of investors to quickly write you off. Doing so would save your time and the bad energy that comes with failed investor pitches.
- For instance, you may find that angel investors you speak with are more ready to hear you out than venture capital firms. You may also discover that general investors do not understand the scalability of your high-tech software, while tech investors got along with your pitch more easily. Identifying the best type of investor to approach may increase your potential for funding success and minimize the chances of pitching your startup to the wrong audience.
- The best approach is usually to research investors before you make any pitch to them. You can check out other startups they have invested in previously and discover the similarities your startup shares with other businesses. If the qualities of your startup are considerably different, this may be a clear sign that your startup won’t be the best fit for their portfolio. On the other hand, if your startup aligns with the qualities of their previous investments, you have a much greater chance of securing their interest.
See Every Pitch Effort As A Contest
- Seeing every pitch effort as a contest would help bring out the best in you.
- Another arm of this is to participate in pitch contests. Pitch contests would give you the chance to pitch as much as you want. This would generate more feedback for you, which may help you to better improve on your pitch. Startup funding is usually a game of chance; the more pitches you make, the better your chances of winning a pitch. The best way to keep trying is by participating in pitch competitions. Pitch competitions would offer you the feedback you are looking for, in an open and more confronting way. Most times, if you are lucky, you may even win some prices. The pitch competitions will offer you the chance to test your new strategies so you can have first hand information about what works and what does not.
Don’t Give Up
This doesn’t appear a cliche, at all. Never give up! Try one more time. Even when it appears all hope has been lost on how to meet your funding goals, keep pushing forward. The trick is this: you may never know how many steps you are away from your success. You may just be one more pitch away from that funding you need badly.
The Bottom Line:
Pitching for funding for your dream business can consume much of your energy, but just learn to adjust and keep improving on your strategies.
Most times, according to Peter Coughter, the author of The Art of The Pitch: Persuasion and Presentation Skills that Win Business, “it’s not because we’re afraid to fail. It’s because we’re afraid that we’ll succeed. That is what truly terrifies us…if you block it, it will never exist through any other medium and it will be lost.”
Charles Rapulu Udoh
Charles Rapulu Udoh a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organisations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution and data analytics both in Nigeria and across the world.