Investors see many deals and can spot glaring holes immediately. Here are five more reasons an investor will take a pass on your deal:
1. Lack of plausible financial projections—some startups use the excuse that they can’t predict the future and therefore they have no financial projections. Most investors see this as a lack of knowledge about the business and the market.
2. Lack of focus in the business plan—some plans are filled with future possibilities and great opportunities but fail to define the core product and how it will be built and sold.
3. Not knowing the use the funds raised—the phrase “I’m raising $1M often triggers the bull meter because the fundraiser rarely knows how they’ll apply the funds.
4. No validated business model—there’s no evidence of a business either in product or customer activity.
5. Lack of followup – an investor will express interest and then never hear from the entrepreneur again.