I’ve had the opportunity to work directly — as C-suite or board member or significant investor — in 11 startups and early stage companies. Also, working on the operating council of the Columbia Angel Network and other angel networks, I’ve reviewed the investor decks and pitches of over 60 early stagecompanies. What emerged from being in the trenches and observing the trials of other founders is a few things that make or break funding success:
1. Underfunded. “We really need funding to cover us for six months, but we can try to get by with less. “No, you can’t. The quickest way to failure is to be underfunded. Make the deal attractive by offering good terms to investors, not by reducing the amount of the raise.
2. Use of funds. This gets stuck at the end of the investor deck or it’s generally too vague. That’s a big mistake. Investors want to know how their investment will have a significant impact on raising company value. Be specific and be decisive. Show why an where the funds are going.
3. Product or management? Obviously, both are important to investors but sophisticated investors, who have significant funds to invest, qualify the investment first by assessing the strength of the management team (success rate, relevant experience) then focus on the product or service. Investors can fall in love with a great idea, but sustained investing is because of the trust in the CEO and management team.
4. Ten pounds in a five pound bag. Most investor presentations give you a short time to present — five, or up to 10 minutes, if you’re lucky. The biggest mistake is to crowd the content — too many words or visuals on a slide — or too many slides which requires you to rush through them. Be very tough on identifying “need to have “ vs. “nice to have.”
5. Brilliant person, not so brilliant presenter. A dilemma. I’ve seen too many presentations go down in flames because the CEO was hard to understand, projected no personality, couldn’t get out of the details. The CEO must be there but, if he or she can’t present well, turn it over to a team member who can.
6. Competitive framework. In the quadrant chart, I’ve never seen the company’s product or service in anything other than the top right quadrant. Same applies to the box check chart. Your product outperforms on EVERY metric. Advice: Be objective and be introspective. Focus on the key points of difference where you can validate your claims.
7. Skin in the game. A seed round is a tough one. Most investors want to see a track record before they invest significant funds. Show where the team has invested heavily in sweat equity and / or dollars. If you don’t show significant risk, why should the investor. Founder team experience, commitment and cohesiveness are frequently under demonstrated.
8. Follow up. Follow up is key with investors and personality matters. Think left brain as much as you talk right brain. Investors gravitate to a CEO and management team they can relate to. I’ve seen too many “brilliant” CEOs go unfunded because the investors couldn’t relate to him or her. Use the follow up after the presentation to develop that relatability. Use your EQ.
9. Red sea vs blue sea. It’s the old fisherman’s philosophy. Fish in the red sea where there are a lot of fish but a lot of boats, or fish in the blue sea where there is less competition but fewer fish. Experience shows that going after investors who know your field (particularly in areas such as tech or healthcare) — is more successful, even if it’s more crowded. This applies particularly to startups and early round fundraising where it’s too early to show a track record.
10. Product-Market Fit: Proof, Not Just a Promise. Too many startups pitch based on the assumption that there’s a demand for their product, rather than proving it. Investors want to see traction — whether through revenue, user growth, retention metrics, or even strong customer validation (pilot programs or testimonials). Show clear evidence that your solution is not just a great idea, but something the market truly needs and is willing to pay for.
11. Scrappiness: Smart Money Wins. Investors love founders who know how to stretch a dollar without cutting corners. Demonstrate how you’ve been resourceful—leveraging strategic partnerships, optimizing operations, or achieving milestones with minimal capital. Show that you’re not just raising money to burn through it, but that you have a disciplined, high-ROI approach to spending. Efficient capital use signals to investors that their funds will be maximized for growth, not just expenses.
There's nothing more exciting and rewarding than being an entrepreneur but applying normal business logic and principles are critical. Eighty percent of the Shark Tank deals never happen or fall apart in the first three months. Love at first sight generally results in buyer's regret -- both by the company and by the investor.
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