7 Mistakes Sabotaging Your Startup Fundraising (And What To Do Instead)


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with US venture capital fundraising at 6-year lowraising investor capital for your startup has become more challenging than ever. Potential investors are tightening their budgets and adopting a “wait and see” approach before putting their capital at risk. However, some of the best startups – like Airbnb, Uber and Square – were born during the market downturn. So if you are one entrepreneur Seeking capital in this environment, you may wonder about your chances of success.

Like one serial entrepreneur and now CEO of Builderall, I've heard over 3,000 titles and helped founders raise millions. From my experience, seven common mistakes often hinder efforts to raise investment capital. If you're looking to raise money for your startup in this uncertain economic environment, be sure to avoid the following:

Mistake #1: Rushing the field

Many founders rush into their field, but speed isn't always your friend in the world of venture capital. Your goal is to make key points and let them resonate, not to finish your presentation as quickly as possible.

Think of it like telling a good joke at a party—you wouldn't rush to the punch line before everyone has a chance to understand the setup, would you? The same principle applies when pitching. You want yours investors to stand behind every word. But this is impossible if you rush or ignore essential information.

An effective technique is to use strategic pauses. In between slides or after you've made a key point, pause for about three seconds to let it sink in and observe your audience's reactions. Don't be afraid of silence. Patience in labor can be a powerful strategy.

Related: What every entrepreneur should know about raising capital

Mistake #2: Skipping trust indicators and key differentiators

Balancing detail with brevity is tricky, but essential. There are some critical signals you need to share to help build trust and differentiate your business. While most founders want to focus on how great their product is, there are two questions that are perhaps more important:

  • Why is your team uniquely qualified to lead this business?
  • How does your company stand in the market?

In terms of team qualifications, don't be shy to include specifics on years of experience, prestigious university degrees, previous exits, existing patents, and/or impressive startup or corporate experiences.

I once coached a struggling founder increase capital. After reviewing his pitch deck, I said, “The problem is you have no real startup experience.” He then proceeded to tell me that he and his co-founder sold their last company for $80 million, but he thought it wasn't important since he was in a different industry. Let me tell you, your track record is 100% important to whether or not investors will trust you with their money.

Next, I can almost guarantee that whatever amazing idea you're coming up with – we've probably already seen it. This begs the question, how will you do things differently when you go to market? This is where your current appeal becomes essential: existing user base, early subscribers, accepted patents and strategic partnerships all come into play. These elements show that you are not just another idea, but a sustainable business that is already making waves.

Mistake number 3: Talking too much and for too long

I know – this sounds like a contradiction based on the first point, but hear me out. Talking is another fatal mistake. You need to plan for a nine-minute pitch, but you don't want to “finish” your nine minutes in a hurry. Instead, be ruthless about what to include – and what to cut – so that the pacing feels natural and you're still covering the key data points that make your business compelling.

I often ask new founders to pitch their startup in just two sentences: What do you do and why should I care? After that, you have less than 10 minutes to explain your market problem, market size, your business model, your solution, your appeal, your team and your question. This means you need to be very specific about which details will tell your story most effectively.

I've seen many founders get nervous and overcompensate by filling the conversation with unnecessary details and filler. This often has the opposite effect of what they intend. If you talk too much or too quickly, investors may think you're not direct, or they may get bored and lose interest.

Related: 5 Innovative Ways for Entrepreneurs to Raise Capital in Today's Market

Mistake number 4: Forgetting who you're talking to

Remember, you are reaching out to investors, not potential customers. Investors are not interested in how great your product is; they want to know about your market, margins and differentiation.

I once sat in on a pitch for a young women's jewelry startup where the founder spent the entire time trying to sell me on the jewelry. As an investor, I was not the target audience and the pitch fell. Instead of selling me on the business, she was selling me on the product. When they talk to investors, they want to hear about the business opportunity, not the product.

Mistake #5: Undermining your credibility with loose language

This may seem like unnecessary semantics, but words like “hope” subtly signal uncertainty, and investors don't want to risk “hope.” They want clear projections backed by data and logic.

Instead of saying “we hope,” use phrases like “we will” or “we project.” This change immediately increases the credibility of your pitch. Be definitive; your words should exude confidence, not wishful thinking.

Here are some more examples:

  • Instead of saying, “We think our product will be successful,” build your confidence by saying, “Our product is positioned to be successful.” This subtle change conveys confidence and strengthens your stride.
  • Replace “We believe our revenue will increase” with “Our projections indicate our revenue will increase.” This not only sounds more authoritative, but also shows that your assumptions are based on concrete data.
  • Don't say, “We aim to capture 10% of the market;” instead, say, “We're on track to capture 10% of the market.” This arrangement shows that you are actively working towards a clear and achievable goal.
  • Change statements like “We expect to launch by Q2” to “We will launch by Q2.” This small change projects certainty and credibility, which are essential for building investor confidence.

These subtle language changes replace hesitation and probability with persistence. It emphasizes that your pitch is built on credibility and backed by a solid, well-thought-out plan.

Mistake #6: Using broad claims instead of precise data points

When pitched to investors, generalized claims can raise red flags, causing investors to wonder if you're trying to obscure the truth or lack the necessary details.

For example, instead of saying, “We have a huge subscriber list,” focus on concrete details like, “We have over 20,000 subscribers.” The specifics not only clarify your claims, but also significantly increase your credibility and trustworthiness.

Here are some more examples:

  • Don't say, “Our team has a lot of experience.” Say, “Our team has eight years of experience in this industry.”
  • Replace “Our product is highly contagious and our customers rarely leave” with “Our product has an 89% customer retention rate.
  • Instead of “We anticipate rapid growth,” say, “Our projections show 30% month-over-month growth in the fourth quarter.”
  • Change “We dominate the market” to “We currently hold 45% of the market share in our region.”

These wording changes turn vague statements into strong, data-backed statements that help build investor confidence and convey that your plan is grounded in reality.

Mistake number 7: Telling instead of telling

Our final lesson: show, don't tell. Describing something visually instead of words will have a greater impact and will be it is more likely to be remembered. Instead of telling investors, “We have a great interface,” show them screenshots of the interface and let them decide for themselves whether it's great or not. Instead of saying, “We've grown exponentially over the years,” show a line or bar graph that illustrates your impressive growth.

Another example: telling investors how much your customers love you has far less impact than showing screenshots of social media posts where your customers are raving about you in their own words. Keep this mantra in mind: less talk, more visuals.

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Mastering the art of pitching involves more than just avoiding pitfalls—it's about crafting a narrative that resonates with investors and builds trust. However, by avoiding these seven mistakes, you significantly increase your chances of securing the capital needed to take your startup to the next level.

In today's challenging economic climate, communicating accurately, showing rather than showing, and providing data-backed arguments will set you apart. Investors want to back entrepreneurs who can weather adversity and lead their ventures to success. Keep refining your plan, build strong relationships, and show investors why your startup is the one to bet on.



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