5 Reasons I’ll Automatically Pass on Investing in Your Startup

Fix these basic problems first before looking for investors

Avoid these red flags when you pitch to investors. Photo by Girl with red hat on Unsplash

I spent last week listening to 100 pitches for early-stage startups. I’m exhausted.

My angel groups typically invest in roughly 1 out of every 100 applications. That means 99% are passes. For at least half the pitches, it’s obvious within a minute that they’re no-goes, so instead of listening closely (sorry), I started taking notes on the reasons why so many were obvious drops.

Before you waste weeks or months of effort pitching, make sure you’re ready for investors. Here are 5 reasons I noted that were automatic drops, as well as a few additional reasons many were unlikely to go beyond the pitch.

1. No Product Yet

Friends and family will support you bringing your vision to fruition. Grant opportunities and accelerators can help, too. Investors, including angels like me, invest in a completed product.

We’ve all heard stories about entrepreneurs with nothing but a powerpoint presentation (or less) who received millions in funding from investors to build the product. They’re great stories. People win billions in the lottery, too. It just won’t be me or you.