Common Pitfalls That Turn Off Investors

David Travers is a partner at Rustic Canyon (http://www.rusticcanyon.com/). In this video he discusses how to avoid some of the pitfalls that can turn investors off.

  1. Chasing the latest trend
  2. Underestimating the challenges of your idea
  3. Pretending to know all the answers

Transcription

There are several common pitfalls that entrepreneurs make fall in to when they are trying to raise money. A couple of the most common are one; transparently chasing the latest trend. So there’s always going to be some company or some trend that has captured the imagination of the business community and entrepreneurs will try to frame artificially their business around whatever the successful most successful companies of today are. Stay true to what it is you are truly passionate about and truly want to do. Investors will see right through a false attempt to try to make your company something that’s really not just because it’s hot today.

Two; I would avoid at all cost underestimating the challenges of succeeding with your idea. There is never a business that succeeds out there that doesn’t have to overcome incredible challenges. So when an entrepreneur comes in to pitch an investor and says actually it will be very easy for me to do that. Actually my competition isn’t very smart or isn’t very good. That’s a big red flag for an investor because we’ve seen many times before that it’s never easy. So take on your challenges head on.

And finally don’t pretend to know all the answers. It’s fine to say we haven’t figured that out yet. Here’s the process I’m going to go through over the next two months to come to an answer to a particular strategic question rather than saying without having really sought something through. Here’s my firm answer to a question you really don’t know what the answer is to.

If you follow those key--avoid those key mistakes I think you’ll have a lot more success.

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