You don’t tell them enough information about the return on investment
The approach of telling the investors on how many percents return they will get is not enough to convince to invest in your company or in your project. The investors have many questions that they would like to know before they can invest in your company. The investors like investing in the company that they know how and when they will get their return on investment. Give in details of how the investors will get paid from their investment such as, is it monthly, yearly or when the company is sold.
You don’t tell the investors about their exit strategy
Some of the investors are interested in investing in startups which can have huge value after several years. Explaining about the product is not enough, therefore, you need to explain about their exit plan, so that the investors will make a clear decision in investing. Explain in detail about the exit plan such as when and how. The investors want to know if the company will be sold in 5 years or if it will be IPO in 5 years. Therefore, you should tell them how many percentages of ownership they will have in the company. If you are looking for investors for your small business the exit strategy can be returning their investment with interest after a given year.
You don’t tell the investors about the value of the product
Your product might be really good and interesting, but the investors would like to know the value of your product in 5 years time. Telling how great your product is not enough to convince the investors, therefore, explain how important it is to the public. The investors want to know if your company will have a high value when the company is sold. Therefore, it is important to make a good projection of your product such as how many people will use it and how you will create public awareness of your product.
You don’t tell the step by step formation of your company
The investors wants to know if you are capable of forming the company, therefore, it is important to tell them about your plan in forming the company.
You don’t have a good team
If you don’t have a good team or if you don’t tell your investors how great your team is then they might not have faith in you delivering your business plan. The investors are usually highly interested in a company that has an experienced team. Therefore, it is vital to pick your team carefully.
Your cost is too high
The investors want to know the cost of your project because they want to know if you will get enough investors and they also want to know if you will exhaust the investment. If your cost is too high then the investors will want detail of the cost, if you don’t provide enough details then they might not want to invest because it shows that you are a lack of information about your business.
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