Things not to tell investors

We only need 1% of the market…

This is the “everybody needs shoes” argument.  Since all 6 billion of everybody in the world needs shoes and we only need to sell 100 pairs a week to make you rich – our plan MUST succeed.

 Market share is irrelevant to young companies – it’s selling ENOUGH that matters.

Gartner predicts our market will grow huge…

Somebody ought to do a survey looking BACK and market predictions by large, well respected research organisations to see how often they are right.  Somebody once told IBM the world only needed 6 PC’s.

Market size is irrelevant to young companies – it’s selling ENOUGH that matters.

Our projections are Conservative…

Actually, your projections are guesses.  You have convinced yourself that you could do really well by winding up the parameters in the spreadsheet and that by taking a lower start point, you are being “conservative”,

Projections are irrelevant to young companies – it’s selling ENOUGH that matters.

We already have several backers interested…

So you don’t need me then – goodbye.  Why would a backer want to compete to invest in you?  Anyway, if you’ve got such a good pitch, just make it and keep your powder dry.

Negotiate with when you have an offer on the table, not before.

The Queen (or anybody impressive) is about to sign an order…

Actually, they are not.  They may be intrigued, they may be polite, but if you were about to get an order, you’d have got it before you went out looking for backing.

Actual orders are infinitely more impressive that promised orders.

Microsoft (or big company X) is too slow to be a threat…

Of course they are.  They will wait until you have created all the noise before they put some serious resource into it – then they will take the market.

Every competitor is a threat – be clear why you have an advantage.

Key employees about to sign up…

If they were key, they should have already signed up.  What you are saying is that you need more talent, but you can attract it?

Backers want to see a committed team, covering the necessary and sufficient skills.

We have a patent applied for…

Do you really know how this stuff works?  You can take years to get a patent and spend a lot of money… then somebody either sneaks by it, or just plain breeches it – then what are you going to do?

Implementation is more important than attempts at protection.

Updated: March 29, 2014 — 11:48 am

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