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A killer business idea doesn’t always mean that you’ll be able to attract the funds of investors. They’ve seen all manner of ideas, and they need a reason to believe that yours will be especially profitable. We’ve all seen programs like Shark Tank and Dragon’s Den, and some of the best ideas are sometimes turned down. So, why does this happen? Here are some possible reasons.
1. You Don’t Know Your Stuff
Before you present your business idea to a selection of investors, you need to know what you’re talking about. You wouldn’t go to a job interview without knowing something about the company, right? It’s incredibly important to be on the pulse of every statistic that matters. Know those product testing scores off by heart. Reel off every financial detail about your company that’s relevant. Be prepared for extensive questioning.
2. You’re Pitching To The Wrong People
Sometimes, you might have a fantastic idea that ticks all the boxes, but you’re pitching to the wrong people. You don’t want to go showing off your latest sports-related product to an investor that knows nothing about that industry. Similarly, you don’t want to talk about high-tech gadgetry with a technophobe. Target the right people, and you’ll have a greater chance of gaining success.
3. You Idea Isn’t Unique
Sometimes, a business idea might have all the hallmarks of success, but it’s too familiar. You need to find a way to make your product stand out from the rest. Twitter did it through hashtags and character limits. Look at Hampton Creek information — their unique ingredients attracted millions worth of investments. Familiarity isn’t necessarily a bad thing, but there needs to be something in there that makes you stand out above the rest. Otherwise, you’ll just get lost in the shuffle.
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4. It Doesn’t Have Mass-Market Appeal
Then, there are those ideas that simply don’t serve a large portion of the market. It’s OK to develop specialized PC keyboards for gamers, but you need to be realistic with your goals. If you develop accessories for gamers who just play Rocket League, you’re narrowing your audience too much. Your idea needs to serve a purpose for a relatively large portion of people. If you can’t achieve that, what’s the point?!
5. You’re Lying
Investors have seen it all before, and they’ll know if you’re lying to them. When you’re presenting your idea, don’t be tempted to make up facts on the spot. You’ll potentially be asked some mightily tough questions, and if you don’t know the answers, that’s OK! It’s much better to simply admit your lack of knowledge than to try and bluff your way through the situation. This is an instant turn off, and even if your idea is a good one, you won’t achieve success.
So, if you’ve found an idea that appears particularly profitable, proceed with caution. Take the time to study our tips and prepare your pitch. Make sure you’re ready before you approach any investors, and you’ll be best placed to achieve success.
