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10 Rookie Errors to Avoid When Looking to Raise Money

Raising money is not for the faint of heart but the process would be infinitely easier of entrepreneurs didn't make these 10 mistakes when pitching investors

If you haven't been living in Mars, you would know that medical device startups are having an excruciating time raising money. The lenghty and uncertain regulatory cycle combined with slowing markets in key device segments mean that investors are extremely cautious and choosy about where they invest. This is especially true at the seed level.

 

In such a climate, having a flawless pitch to investors is mandatory if startups expect to convince them. The infographic below from Dave Parker, Director of the Seattle program of the Founder Institute lists the 10 rookie mistakes that entrepreneurs make when they present their ideas to investors.

Ranking at no. 10 is the failure to use charts, graphs and tabs in pitch materials. Numbers matter but visuals matter a lot too and charts and graphs combine these two elements in a nifty package.

While numbers are important, investors want to hear a good story. At no. 7 is the entrepreneur's inability to connect the business' financial model to his or her overall narrative.

 Startup founders also need to demonstrate knowledge of the market in which they will play in, but many of them are clueless about comparable market metrics - that mistake comes in at no. 2.

The biggest mistake that entrepreneur's make, according to Parker is their unrealistic future financial models - in other words projecting $1 billion in revenue in five years.

For more rookie errors, see the infographic below:

 

 
 
 
 
 

[Entrepreneur.com via Pinterest]

 

-- By Arundhati Parmar, Senior Editor, MD+DI

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