What Not To Say in a Fundraise

Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

In raising funding, startups should avoid these statements to investors.

“We have no competition.”

If there’s no competition, then there is no market.

Instead, the founder should talk about how the startup solves the problem in a new and unique way.

This is the value proposition of the business.

“You’ll need to sign my NDA before I can tell you about my business.”

The investor will interpret this to mean there’s no protection on the business, such as intellectual property.

Instead, the founder should limit the discussion to the benefits their technology provides and not go into how it works.

“I’ve included my sweat equity on the cap table.”

The investor will only recognize equity that is bought with dollars.

The founder should consider sweat equity as table stakes that all startups must bring to the fundraise.

“We only need 1% of this billion-dollar market to be successful.”

While this statement may sound compelling, the investor interprets this statement as lacking a go-to-market strategy.

The founder should focus on their initial traction with customers by outlining the first twenty customers they will pursue.

This shows a focused approach to entering the market.

Avoid these statements in your pitch.

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let’s go startup something today.

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