Entrepreneurs spend a lot of time preparing an investor pitch and they tend to get discouraged when the investor refuses to fund their venture. The single point of the pitch is to raise money from the startup and when this does not happen, the entrepreneurs begin to think that their startup has failed. Founders fail to look at the bigger picture when preparing the pitch. They only focus on the end-raising money from the investors. It is important to keep in mind that the investors’ response to most fund raising speeches is going to be negative. Capital is a rare commodity and is not easily available in India. Even when an investor says that your idea is good, he may not have enough funds to invest in your business.
Every investor is constantly approached by various entrepreneurs with new ideas. No investor can have enough liquidity to fund the startups even when the idea appeals to him. Do not doubt your business when an investor turns you down. A no means that the investor is not right for you or your business at this point of time. It does not mean that your startup is not going to do well.
The first thing to keep in mind, is that your pitch should not be limited to raising money. The odds of raising money are stacked against you and you will start getting frustrated when it does not work out. With every ‘No’, you are going to start doubting your business. You need a change in your perspective, and think of the pitch as an opportunity to learn from other individuals in the startup ecosystem. An outsider, who can provide fresh insights for the growth of your business.
The aim should be to get smarter with every pitch. An investor will ask tough questions, which shows that he is interested in your business. Answer the questions without getting defensive and keep an open mind. Getting upset with the investor will lead you nowhere. If the investor has not been able to understand your point, do not assume that he is dumb, it also means that you are not putting your pitch properly and need to work on the same. The pitch should be conceptualized in such a manner that makes it easy for the investor to understand. If the investor asks more questions, it means you have made your points very clear and he is showing interest in the startup.
An investor may not have expertise in various domains, but he has an experience of hearing many pitches. He has heard pitches from various entrepreneurs across the industry, which means he will compare you with your competitors, connect with fellow investors in the industry to know about your weaknesses and will tap into his network of investors to gain additional information about the future of your business.
You can use the feedback and the criticism to improve your investor pitch, until you finally find an investor who is right for your business.