2012-12-14 00:00:00 Money & Finance English https://d3hrajprm8dqcv.cloudfront.net/wp-content/uploads/2017/05/08195439/Investor-Reject-225x3001.jpg How to Put Off Potential Investors

How to Put Off Potential Investors

2 min read

You think you absolutely nailed your recent pitch to a potential investor and are convinced that he/she is going to financially back your small business. You may already be dreaming about how swanky your life would turn out to be when your idea is being touted as the breakthrough idea of the decade! But to your utter dismay you hear a call or see a mail of rejection and you find yourself saying, “but I did everything right!” Honestly though, you should be asking this question – “where did things go wrong?” There are chances that circumstances changed for the investors, but more often than not, you may have unwittingly put off the investor! Here’s a checklist of some of the things you can do to “successfully ward off” an investor. Even a single tick in this list can prove quite expensive! • Looking through rose coloured glassed: Painting a realistic picture is important. While optimism is great, getting carried away with projections could make the investor skeptical about the true possibilities of your project. • You were overconfident: Investors are judging you and it comes down to how much confidence they have in you as an individual and in your business. You need to show confidence in order for another person to believe in you, at the same time ensure not to come across as cocky or over bearing. • You mixed up research and stalking: Maybe you were too thorough with your research. There is a fine line between knowing your investor professionally and stalking them. Strike a good balance. • You were vague: Clearly communicating your vision and the strategy is crucial. Multiple strategies show no direction and investors won’t be able to identify with your vision. • You underestimated the competition: True, you may have a winning business model but can’t rule out the possibility that your competitor’s business could be great too. Know your strengths and weaknesses as well as your competitors. Your investor will definitely do his research on this. • Flattery didn’t do the trick: While a few compliments could help win some points, any investor is quite weary of baseless flattery. • Your background: Your own personal record plays a big role in convincing the investors. A clean history is one of the biggest selling points. • You did not reiterate key points: The investor is investing a huge amount of capital and understandably is concerned about the ultimate result, namely profit. One of the best ways to keep an investor engaged is to reiterate from time to time about the kind of profits he/she will be making at the end of the project. Put yourself in an investor’s shoes and think of various things than can put you off. While a thousand positives may go in your favor, it takes only a thing or two to against you. As a precaution, while you prepare a “To Do” list, prepare a “Don’ts” list as well.

Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

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