As a business founder seeking capital funding, there are certain things that you should avoid telling investors. Here are some examples:
Exaggerating financial projections
It’s important to be realistic about your financial projections and not to exaggerate them in an attempt to impress investors. Overpromising and underdelivering is a surefire way to lose investors’ trust and damage your reputation.
Hiding risks and challenges
Every business has risks and challenges, and investors expect you to be upfront about them. Trying to hide or minimize potential risks can make you appear dishonest and untrustworthy.
Overselling your product or service
It’s important to be passionate about your product or service, but overselling it can lead to disappointment down the line. Investors will appreciate honesty and transparency over hype and exaggeration.
Withholding information
Investors need to have a clear picture of your business, including financials, team structure, and growth potential. Withholding important information can make them question your transparency and credibility.
Criticizing your competition
While it’s important to differentiate your business from your competitors, criticizing them can make you appear unprofessional and negative. Instead, focus on the strengths of your business and how you plan to stand out in the market.
Making unrealistic promises
Promising investors that you’ll make them rich overnight is not only unrealistic, but it can also damage your credibility. Be honest about the timeline for growth and the risks involved in investing in a startup.
Bottom Line
Investors want to see a clear and honest picture of your business, including the potential risks and challenges. Being transparent and realistic can go a long way in building trust and securing funding.