Trying To Get Funded? Here Is What Not To Do


Are you looking for an investment for your startup idea? While there are venture capitalists out there who would be more than willing to invest in a great idea, it is not as easy as it sounds. With almost 50% of startups failing within the first four years, you cannot expect venture capitalists to be easily convinced. If you are about to meet a venture capitalist regarding an investment, here are ten mistakes you need to avoid.

Related read: Funding Your Startup in a Tightening Market

Trying To Get Funded? Here Is What Not To Do

1. Not Preparing For A VC Interview

Being oblivious during a startup meeting is a huge mistake, and it can lead to your investment being called off immediately. Before you talk to a potential investor, it is important to analyze your idea and how you want to bring it to life. You need to know about all the drawbacks of your idea and how you plan to resolve them. While a brilliant startup funding pitch is definitely needed, you need to fully understand your idea and how you plan on using the VC’s investment for finding your path to success.

2. Ignoring Your Competition

If you have a great startup idea, the chances are that someone else has come up with the same idea as well. And even if you are truly going to innovate in your target market, you can expect competition to pop up immediately. You need to be aware of how you plan on dealing with competition. It is likely that VCs will ask you about potential competition and you need to be prepared with a plan to compete against other startups or bigger brands.

3. Asking For A Non-Disclosure Agreement

Unless your startup is dealing with the idea that it is very sensitive or technologically groundbreaking, you do not want to ask for an NDA. It is a major annoyance to an investor and you want to avoid it if possible. An NDA is time-consuming and only adds to the complexity of your contract with your VC.

4. Not Having An Investment Plan

Buyers always would like to defer the decision of buying. So if you do not show them the urgency of investment, they won’t. Having a solid plan to execute your business idea using the investment you get is important. You need to be judicious with your capital and if you cannot convince your investor that you will be responsible for their investment, you will have a failed VC meeting.

Ayush Jain, CEO & Co-founder of Mindbowser Group

At Mindbowser, my CTO and I teamed up to build an agency that can bring the best of tech and knowledge to founders.

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5. Aligning Yourself With Everyone Else’s Performance

If you want to have your own startup, you need to convince your VC that you can outperform your peers. If your expected profits or growth rate are on par with everyone else in the market, there is no value to be seen from the eyes of an investor. We only hear about products and services that innovate. And not being innovative also means that you are more likely to fail as a startup. Show your investor that you want to beat your competition and not just be like every other business out there.

6. Expecting Your Investor To Understand Your Idea

Not all investors are interested in innovation. They just want their investment to yield profits. You cannot spend hours at a VC meeting with investors who are interested in the money matters and your success more than anything else. If you have a great business idea that receives a lot of negative feedback, you should not give up on your idea. But taking positive feedback and potentially making changes to your roadmap is just as important.

7. Over Preparing For Your Investment Meeting

If you try too hard to convince your investors why they need to invest in you, they see right through you. While having necessary information like financials, market projections, and your mode of operations are important; you can’t fool investors. Your plan for your business needs to be convincing but it also needs to be backed by solid reasoning. It is more than likely that things you have in mind for your business will not align with your investors. Some investors openly indicate what they expect from your business while others do not. The easiest way to find out what your investor expects of you is just to ask them!

8. Finding The Wrong Investors

Get funding for a startup, definitely not an easy task. You cannot expect an investor who is known for investing in automobile startups to fund your online food delivery chain. While there are investors out there who are strictly concerned about money matters and would be willing to invest in any idea if it is promising, communicating your idea with them can be difficult. In the purpose of startup business funding, try to find investors who have experience in the industry you are trying to enter, and it will make life much easier for you when you try to find investors.

9. Having Too Many Processes

Investors want your business to be as efficient as possible. You do not need to have documented procedures for everything or have too many team members working on simple tasks. As a startup, you want a small but robust team that is capable of handling all your business activities. Investors are less likely to take up on your offer if you are not judicious with your resources. Startups need employees who are capable of being creative and efficient.

10. Offering Too Many Details

You do not want to make the investment meeting boring for your potential investors. Getting into the technical details of your product is far less important than showing signs of having a clear goal in mind. Focus on telling your potential investor how you want to use their investment and what kind of growth you expect from your venture. Results matter much more to investors than the minuscule details about your product. Get into technical details only when you are asked to.

John Rampton

Founder and CEO of Calendar

When you are trying to get funded, DO NOT wait to get the largest amount you think you can get. If you have an offer on the table that is a bit smaller than what you wanted but all the other factors line up, take the money! I’ve seen entrepreneurs turn down great funding opportunities that are smaller but where they could retain control, have an investor who believes in them, and may have future funding lined up with them. When they turned it down, the investor went elsewhere and the entrepreneurs never got any bigger offers.



If you fail to get startup funding, you should not give up on your idea. Find out what went wrong and try to analyze your meeting from the eyes of an investor. Focus on what you can improve about your idea or if you should simply be looking for a better investor. If your idea is worth investing in, there is no reason to doubt yourself!

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