As a startup founder, you know that you should constantly be learning and educating yourself. So, you’ve read a lot about what to do to make your startup successful and how to pitch your idea for funding. But what about whatnot to do?
If you didn’t get a chance to attend our latest info meeting ahead of the 12th STAN Pitching session, we’re sharing some of the key takeaways on how not to pitch your startup idea to investors.
Our guest speakers, all of whom are successful founders, entrepreneurs, and investors, started their careers with startups. The advice they give will help youpitch your startup and attract not just any investor, but the right investor.
Jesus Lozano (Chus Jan), EU Senior Expert on Digital Economy and Digital Transformation, ICT Ecosystem Builder, Business Angel & Advisor
Suren Aloyan, Co-Founder & CEO of PopUp School Ed Tech Company, Founding President & CEO of Dasaran Ed Tech Company
Vahag Karayan, STAN angel, Co-Founder & CEO of BrandLens Inc, Former NASA System Engineer, and entertainment industry executive
How NOT to select an angel investor
Chus Jan: The biggest mistake is not understanding investors. You should understand what they want to hear from you, including your financial projections, obstacles, etc.Always come with traction and a very clear marketing strategy.In Armenia we have few investors who understand the field.
Suren Aloyan: The same way that you are trying hard to be a part of it, they should try hard to be a part of your mission and vision. Your angels should be people who share your vision and mission and people who are coming to support you. Take a look at what startups the angel has already invested in and ask them “why do you want to be my angel?”
How NOT to value your startup
Chus: Every investor is a different world. Valuation is a question of a million. It depends on which stage you are. You should choose the right instrument or tool for each investor, like a convertible note, partnership agreement, etc.
Vahag Karayan: In my opinion, if the idea and founding team are sound, then the valuation can be agreed upon.
How NOT to build financial models of your startup
Chus: If you are not well informed about financial models, then you need to have someone in your company who can manage your investments and has good expertise in finance. But in any case, don’t stay more than 6 to 8 months without sales, meaning proof of concept, MVP, or anything else.
Vahag: It’s tough for Armenian startups to see the global market and financial trends. We are culturally in a “cocoon.” It would be great to have someone in your team with an international background.
How NOT to choose the founding team
Vahag: If you are founders in Armenia, find your team members outside in Europe or in the US who will strengthen your team because it is the pillar of diversity. You want to see what your weaknesses and strengths are and bring in an appropriate co-founder that will supplement them.
Chus: When I look at the founding team, I evaluate the soft skills (problem-solving, communications) as well as hard skills and knowledge to take the product into the market. Resources like network, customer relationship, and experience. Also the thing I take into consideration is the attitude.
Suren: I choose people who share my vision and are mission-oriented. I create an atmosphere where they can feel like they are start-uppers, where any action is towards a result.
How NOT to pitch your startup
Chus: It’s all about connections: intellectual, emotional, and ethical. Moreover, you should have questions and tak checkboxes under each:
Is my solution solving a problem?
Do I have expertise in finance?
Am I generating traction?
Why me?
And remember, business angels invest in growth opportunities.
Vahag: Be strong, enthusiastic, and very confident in your pitch. Also, be a good listener to reflect on the feedback and address the questions in the right way.
Suren: As you are dealing with real people, you need to understand psychology. I always take notes and change my pitch every time. Always keep the intrigue, don't bring everything, describe the problem and sell your vision. And sometimes you talk to people, and they don’t even see the demand, so you educate them about the demand.
Final advice for startup founders
Chus: You have one opportunity as a startup. Fail fast. Fail cheap!
Suren: First thing is the ability to jump into the void. Why? Because you have no clue what’s going to happen. Second, the possibility of chewing glass. Why? Because nobody wants to chew glass, but you should.
Vahag: You should be able to work through uncertainty where you increase the chances of succeeding before you sink all your funds and run out of money.
