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Bloopers to Avoid For Entrepreneurs Who Want to Attract Investors

Updated: May 8, 2023

Every Entrepreneur has an Image and a Credibility. But to build that image , one just needs to do few things correctly. Besides doing things right, it's equally important not to do wrong things. As an Entrepreneur , you don't need to have a bad first date with the VC Firm & hence i have discussed here some bloopers which an Entrepreneur must avoid in order to attract investors / funding :

1) Not Having Patience: Investors are too busy people. Having that first meeting with an Investor can even take months or years in some cases. Expecting too much too soon is not the way this game operates. Patience is the prime key to any investor's heart & wallet.

2) Trying to Raise seed stage investment from a later stage VC is another mistake which many startups Usually Investors target a particular stage of company based on their experience, strategy, investment horizon, and desired return. Before approaching a particular VC , it's necessary that a startup does some research work on Investors.

Most Investors state their sweet spot and list portfolio companies. Also one can talk to founders of the investor’s portfolio companies about their experience—before and after the investment.

3) Cash burn is another issue for early stage startups. Entrepreneurs need to know their cash positions while accomplishing their milestones . This can be avoided by delaying certain capital expenses or holding fixed cost at a minimum. It's factored that resources available to any startups are scarce. One needs to master bootstrapping in order to avoid cash burns.

4) Not having proper documentation and paperwork is another discredit to a startup. Investors need to perform a due diligence process before investing. Proper documentation gets this process smooth & faster than otherwise. Hence Startups need to maintain Key Documents , contracts , agreements , Licenses and other paperwork in a systematic manner.

5) Making Fake claims or False representations about Debts , Loans outstanding, Criminal offences & records , legal suits pending and other legal & financial matters can obviously shoo away a potential investor. Protect confidences appropriately, but never lie or shade the truth.

6) Going on an Ego trip is often a problem , when it comes to conversations between an Entrepreneur & an Investor.There is nothing to be gained and everything to lose when an entrepreneur allows his or her ego to be on top of the talk table. It is important to bring the conversation back to gravity if either of the party boards the Ego flight.

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