From proving market viability and articulating the business plan to meeting with the decision makers, start-up companies and entrepreneurs can see a variety of challenges throughout the funding process. However, to get funded, it’s important to also understand why start-ups don’t get funded.
This summer I was a panelist in the vcfo webinar “Pitch to Win: Get the Edge in Capital Raising.” Among the information presented was the top 10 reasons that start-up companies don’t receive funding.
- The market size is too small to support a need for the product or service.
- The timing for the introduction to market is too late or too early, resulting in a lack of a need.
- The product or service doesn’t match investors’ focus.
- The entrepreneur fails to relate to true pain in the market.
- Valuation expectations by the start-up company are too high.
- A go-to-market strategy is not provided, and investors are unsure how the product or service will be marketed.
- The pitch materials are weak in both content and design.
- Risks and competitors are not clearly defined, which can lead investors to wonder if there is even a need for the product or service.
- Mistakes are made within the financial modeling and project data.
- The entrepreneur and start-up company make fundamental execution mistakes, such as waiting until too late to ask for funding.
For more information on start-up funding, including the key elements of a successful pitch deck and what investors look for in a pitch, the webinar “Pitch to Win: Get the Edge in Capital Raising” can be found here.
