Small Business Loan Wisdoms from Kabbage

Top 5 Small Business Loan Requirements

Congratulations, you’ve decided to launch your own venture, and now you’re curious about the small business loan requirements. While there are many choices and options when it comes to funding your dream, there are important requirements you need to have in place before any lender will consider your small business loan request. Here are the Top 5 small business loan requirements. 

 

Small Business Loan Requirement #1: Make Sure You Have Impeccable Credit
One of the most important, if not the most important small business loan requirement is ensuring your credit is excellent. Maybe not flawless – but it needs to be in really good shape. The key is preparation! Do your research ahead of time. Do you know your FICO score? Your FICO score is a summary of your credit risk which lenders use to assess things such as whether or not to extend credit and if so, at what interest rate. You can identify your credit risk and find out your FICO score by employing free online tools such as the one at www.fico.com.

When meeting with potential lenders, come prepared to show not only your business credit history but your personal credit history as well. Got credit card debt? A few late car payments? Student loans in default? These kinds of things will delay if not halt your small business loan process. Excellent credit is a fundamental aspect of small business loan requirements. Work aggressively to clean up your credit, fix any credit reporting errors (*Note: credit reporting errors do occur. Take time to read your credit reports thoroughly to ensure accuracy. Report any discrepancies immediately).

These factors are key for any lender when they are considering your ability to repay small business loans. Having stellar credit is an essential piece of the lending puzzle. It’s a snapshot of your financial performance – both as a small business owner and as an individual. The bottom line? Know your credit scores, fix any errors, work to improve your credit scores if possible (even if it means delaying your small business loan application process), and come prepared.

 

Small Business Loan Requirement #2: Have a Solid Business Plan
Any lender worth their salt will tell you that a well thought out and thorough business plan is a requirement of small business loans. A business plan is basically a profile of your business. It provides a detailed explanation of what your business is, how it fills a niche, the products or services you’re providing, etc. Essentially, it gives the lender a clear picture of what your small business is all about.

There are online resources to help you write a business plan if it’s not something you’ve done before, but overall, a business plan serves as a “blueprint” for your small business.

A good business plan includes:

  • A detailed description of the product or service you’re offering
  • An explanation of how your product is unique in the market
  • A description of how your business is fulfilling a need
  • A list of tactics and objectives for the goals you’ve identified for your business (i.e. you know where you want to go, but how will you get there?)
  • And perhaps most important, your business plan should show projected revenue


Each of these components provides lenders with a good snapshot of the potential success of your business. Your business plan should be also be a fact-based projection over the next three to five years or so of the expectations for revenue and growth you have for your small business.

Lenders use the information you provide in your business plan to project the success or failure of your business and to determine the worth of your business as it relates to securing a small business loan.

Don’t over think it! Your business plan doesn’t have to be a 12-page dissertation on the history of goods and services. It needs to be clearly stated, in plain English, with tactics and objectives clearly outlined.

There are plenty of free business plan templates and tutorials available online, including one at sba.gov. A solid business plan will serve you well as a tool for day to day reference in your business, and it is a main ingredient in the requirements for small business loans.

Small Business Loan Requirement #3: A Strong and Compelling Personal Resume
A personal resume might seem a bit odd to list as a requirement for small business loans, but it’s an important tool. Potential lenders want to see your work history. They want to know what level of expertise you bring to the table. You aren’t interviewing for a job here, but you are demonstrating that your combined talents and professional expertise have set the foundation for success as a small business owner. Appearances are everything. The more professional you appear on a resume, the more likely a lender will be to consider your small business loan application. 

As with business plans, there are countless free resources online to help you begin, update or polish your professional resume. As one of the significant small business loan requirements, spending a few dollars to ensure you’re painting the best picture possible of your professional accomplishments is money well spent.

            #3a: What’s Not On Your Resume…And Why It’s Important

We said “Top FIVE Requirements for Small Business Loans”, but there are some additional things we want you to be aware of regarding resumes and small business loan requirements.

A good resume speaks to your professional and personal accomplishments, the goals you’ve met and exceeded, the results you’ve achieved, the accolades or awards you’ve earned. It does not, however, indicate whether you’re male or female. Or if you’re a veteran. A person with disabilities. Or someone with social or economic disadvantages. All of these factors are important to convey because not only are there lending laws preventing discrimination of any kind, but there are also specific loans geared toward groups of people who in the past may have been discriminated against unlawfully. Specifically – women, minorities, veterans, businesses in rural areas and those business owners with certain disabilities.

Don’t consider these factors as weaknesses! Rather, you would do well to leverage the opportunities that now exist through fair lending laws to ensure you receive the greatest possible consideration for your small business loans.

In addition to a personal resume, this would be a good time to reach out to professional colleagues, friends and family who may be able to vouch for you. References are definitely one of the most important small business loan requirements – and they’re something that could make or break you. Review your list of vendors and clients. Is there anyone or any business with whom you’ve had trouble? Hopefully, you’ll have a good list of business and personal references that can be provided to lenders as they review your small business loan application.
 

Small Business Loan Requirement #4:  Bulletproof P&L Statements
If you’re not familiar with a basic profit and loss statement or a balance sheet, you may want to do some additional research online. You’ll need to make sure you have both your personal and business financial statements in order and bulletproof – meaning the level of integrity in your reporting is accurate and ethical. It is one of the best indicators as to how your business is doing in the real world and it’s one of the main things lenders consider when reviewing small business loan requirements.

Note: This is different from your credit rating. In simple terms, your P&L sheets represent the revenue you have coming in and the expenses you have going out. The difference between the two – along with other factors such as fixed costs - helps you determine your profit margin.

If your profit margin is relatively small, you may want to consider applying for a microloan. Microloans, such as those offered by the Small Business Administration, provide up to $50,000 to small business owners to help with business-related costs such as start up, inventory replenishment, and business expansion, to name just a few.

While these microloans are beneficial to small business owners, the time it takes to apply for the loan, process the application and wait for a decision can be cumbersome. Most small business owners need the cash quickly to expand their business, obtain working capital, purchase additional inventory or supplies, etc. A quicker alternative to traditional microloans is Kabbage’s short term, merchant cash advance loan called “Kabbage Kash.” It’s a seamless way to get funds quickly and easily and while similar to the SBA’s microloans – Kabbage offers a much faster turnaround time.

Note: Having some form of collateral – something against which you can base the loan application – is important (although not always required) for most lenders. Keep in mind that although your business idea and plan may sound great, without some kind of collateral to put up front, some lenders may be reluctant to offer loans.
 

Small Business Loan Requirement #5: Develop a Comprehensive, Strategic Marketing Plan 
One of the most overlooked requirements for small business loans is the development of a strategic marketing plan with vision toward the next two to three years, at least. Having the necessary capital to start up, re-launch, or expand your business is crucial, but lenders also need to see your plan for how you will successfully promote your business.

Years ago, a simple marketing strategy of direct mail, print ads, radio spots and possible television commercials would do the trick. Unfortunately, many of these tactics require a significant amount of advertising money upfront – funds that could be directly applied in your business to build inventory, expand product offerings, etc. Also, with newspaper and magazine readership at all time lows, who is really going to see your well-placed, highly priced, quarter page ad? The Internet has changed everything – and one thing it’s really changed is the way businesses advertise.

Social media has become one of the most effective and efficient means of advertising whether it’s business to business or business to consumer. By leveraging the powerful reach of Facebook, Twitter, YouTube, email marketing, LinkedIn and/or blogging, you’ll be able to reduce your overall marketing costs and increase your reach to your target audience. Make no mistake, you’ll still need funds for marketing, but the amount is significantly less than in years past. And in the long run, a solid marketing plan based on “new” media tactics will leave you more funds to directly invest in your small business.
 

Final Thoughts
According to the latest US Bureau of Labor and Statistics research, there are approximately 28 million small businesses in the United States. Some succeed and some fail. It really all depends on your dedication, commitment, preparedness and your ability to meet the small business loan requirements most lenders call for.

Traditional lenders of small business loans include the brick and mortar bank buildings you can see on virtually every street corner in America. In fact, when you think about small business loans, personal banking, mortgages and the like, banks are usually the first things that come to mind. But don’t disregard the alternative lenders, such as Kabbage, as well. There are many lenders to choose from, but they are all there to help small businesses – just like yours – to grow and be successful.

All lenders – whether traditional brick and mortar or alternative lenders such as Kabbage – will be looking at three things when reviewing their requirements for small business loans:

  1. Your ability to repay loans
  2. Whether you are strong enough to withstand tough economic times, as evidenced over the last decade or so.
  3. And, they want to see your passion and commitment to making your small business succeed.

The final decision lies with you. It’s your business. Do your research! Know your facts. Put your best foot forward and make sure you’ve met these small business loan requirements.
 

Remember these 5 Requirements for Small Business Loans

  1. Be sure you have impeccable credit
  2. Have a solid business plan
  3. Create a strong and compelling resume (and leverage what’s not on your resume to maximize your loan potential)
  4. Bulletproof P&L statements
  5. Develop a comprehensive, strategic marketing plan


Source link: https://www.kabbage.com/guides/top-5-small-business-loan-requirements

Great work by Bridget Quinlan and Marci Haire of Growthink's Expert Market Research Team!

Awesome client testimonial for work done by Growthinkers Bridget Quinlan and Marci Haire! Great job!

"Thanks Bridget! 

Yes: you have made me a happy man indeed. 
This is my first time writing a business plan. I've found the process extremely educational. 
so glad we went in for another round with the global figures..... Paints a beautiful picture for my investors. 
Look forward to spreading the word about your company. 

Best,
John"

Bridget QuinlanMarci Glasgow-Haire

Wisdom from the Best CEOs - How to Use Time Better

70% of Time Could Be Used Better - How the Best CEOs Get the Most Out of Every Day

Author: Bill Trenchard 

"The average tech CEO works about 300 days a year, 14 hours a day. That’s 4,200 hours a year. The stats for most other tech leaders and startup employees aren’t too far off. It sounds like a lot of time, but for most, it’s not enough. Nearly 30% of that time gets sunk into email. Another third gets spent in meetings — and studies show that half of those hours are completely wasted.

Looking at the schedule of a typical CEO, a full 70% of that time is sub-optimal, and I’ll back that up with my own experience. Prior to joining First Round as a partner, I served as Co-Founder and CEO for three companies, including LiveOps. Today, I meet with dozens of founders every week, helping them grow their teams and get more productivity out of themselves and the people they work with. They know they should be using every hour to move their companies forward, create great products, close deals and hire the best candidates. Many just can’t find the time. So, how do we get better?

This year, I spent several weeks leading up to our annual CEO Summit catching up with people I know who do a superhuman job at managing their time. My goal was to capture the tools, tips and hacks they use to make every work hour count. Below, I share eight strategies that have worked for them and for me, so we can all stop wasting time and missing out on opportunities."


1. SAY NO. 

2. BE AN EMAIL NINJA. 

3. MANAGE YOUR ENERGY.

4. BUILD PLAYBOOKS.

5. GET GREAT AT EXTERNAL MEETINGS. 

6. GET GREAT AT INTERNAL MEETINGS.

7. LEVERAGE ASSISTANTS.

8. GIVE YOUR TEAM LEVERAGE.

"If you implement these simple hacks, you can get that 70% of time you aren't maximizing back. You can spend less time in meetings and your inbox. Most importantly, you can get back to leading, inspiring, closing deals and changing the world."


For the full article click here.


5 Distribution Experiments You Can Do For $10 Or Less

By Matthew Berman

One of the common reasons / excuses I hear from companies as to why they’re not focused on distribution experiments has to do with the fact that founders think they need a large budget to have meaningful results.

We get it. It’s understandable not to want to blow through precious seed dollars with haphazard distro experiments. Don’t do that!

But just because you’re on a budget (who isn’t) doesn’t mean you should put off distro experiments until you raise a lot of funds. If you wait that long, you might not be able to raise.

Successful experiments can net you results that you can use as a stepping stone to run more segmented experiments, and/or funnel back into product development. The point is to start gathering data immediately.

Just like the lean startup methodology, we’re going to launch our ads early (build), read results (measure), and focus on expanding the signals of success (learn). 

“We don’t know what we’re doing and don’t want to waste money.”

This is valid. Most companies starting out don’t have a distribution hacker on demand, and could very well be shooting dollars in the dark.

Here’s what happens when you throw out paid acquisition altogether:

a) you handicap your product by cutting out a potentially valuable acquisition strategy

b) your company misses out on a valuable mine of ongoing feedback and data that could be going towards product development and improved messaging

c) you miss out on learning about your messaging, value propositions, and landing pages.

At 500 Startups, we believe in starting distribution from day 1.

To get you started, here are 4 distro experiments & hacks that the 500 Distribution Team has used to help our 1:1 clients and accelerator companies run distribution experiments and improvements on $10 a day — or less. 

#1 Test your conversion funnel

We recommend Mixpanel to a lot of our companies because it gives you free events / people in exchange for you simply putting their logo on your site.

HOW TO DO IT
1. Set up events at each step of your funnel and find the weak points in your funnel. Work to improve the weak points first
2. Reduce registration friction by only requiring completely necessary fields. This will increase the amount of users entering your product but be aware this will reduce the overall quality of incoming users. The hope is the increase in volume will offset the decrease in quality.

COST: Free

Wait, you don’t have an email funnel? You should really get on that. But don’t worry, it’s easy to get started with something simple, and still get results right away. 

#2 Capture / recapture abandoning users with funnel abandonment emails

This can be also done through Mixpanel.

HOW TO DO IT
1. Set up a people property for the “last step in funnel” that the user takes and email them a customized message when they drop out of the funnel.

2. You can also set up people properties for your best customers to reward them for hitting certain retention goals.

COST: Free 

#3 Test FB ads at minimal spend

If you don’t know what you’re doing, spending on FB ads can be scary like a runaway train. Luckily, there are a few techniques to mitigate risk and limit spend while still getting most of the key benefits of advertising on Facebook.

HOW TO DO IT
When you don’t have a large budget to spend it is best to start with broad targeting. It may seem like starting very targeted is the best path to take with a low budget, but there’s a needle-in-the-haystack problem with this approach. If you have 100 factors you can test and you are only testing 1 at a time, you’ll need get lucky with picking the one that is successful first. With broad targeting, your highs won’t be as high, but you’ll be able to test more general assumptions — which is how you need to start. You can also look for signals of potential success.

  1. Always test male/females separately. Gender segments will typically perform differently.

  2. Always test different age ranges separately. Different age segments will also usually perform differently.

  3. Test different value propositions, copy, and images.

    COST: You can get valuable results with a spending cap of $10 a day. 

#4 User Interview

One cheap method that garners valuable insight is the in-person interview. Aaahh! Talking to real people! We know, we know, but for $5, the insights you’ll learn are worth any potential awkwardness. And it’s never awkward to WIN, at UX and distribution that is.

HOW TO DO IT
Go to a coffee shop, buy people a cup of coffee, and watch them use your product. You can observe people’s natural interaction with your product, or suggest specific goals / actions for them to achieve.

  1. Focus on your onboarding flow. It will be painful to watch because things that are obvious to you as the creator are sometimes not obvious to users. But good-painful.

    COST: $5 or less 

BONUS: Learning The Tools

One final important reason to get started with distribution early is so you can learn the tools now (before you go big time)! This will save you time when you’re ready to scale your distribution strategies. 

Conclusion

Even if you’re not Whatsapp (and you’re not), or an amply funded startup, you don’t have to sit on your hands and wait for distribution to come to you. There are LOTS more experiments beyond what we’ve briefly outlined here, all at varying levels of spend.

The most important thing to keep in mind is that distribution should be a core focus for your company, now. Start early, start small, but START.

http://500.co/2014/03/13/5-distro-experiments-you-can-do-on-10-or-less/

The Art of Following Up (Without Being Annoying)


I once sent a pitch to a former client. I hadn't worked for this client in several months, but she paid well and I was eager to get another piece of business. I was certain I had a proposal she would be interested in. But my contact didn't respond to my first email. Or my second one, a couple of weeks later, or my third, a couple of weeks after that.

We had a strong history together and I really wanted to work with her again. And so, instead of my usual practice of giving up after a couple of tries, I kept at it. After yet another email went unanswered, I called her office and left a message. A week later, I left a message again. (I was feeling more and more like a stalker, but I really wanted the job.) A week after that, I called one more time--and she happened to pick up the phone.

She hadn't read or didn't remember my emails or phone messages, so I explained once more what I had in mind.

"That's interesting to me," she said. And gave me the job.

As soon as I got off the phone and got done whooping for joy, I pulled out a little yellow sticky note. "Persistence pays!" I wrote with a red felt tip, and stuck it to the side of my computer. For years--until I changed computers a couple of times and the stickum wore off--that little note stayed in place as an important reminder that what can feel like obnoxious pushiness might actually be the appropriate behavior needed to get a customer's attention in this busy world. It's a lesson I've often forgotten, but when I've remembered and made the effort to follow up and then follow up again, I've rarely been sorry. More than once, it has led to an unexpected sale.

On the other hand, as someone who receives a lot of pitches, and more than my share of follow-up emails and phone calls, I know that there are effective ways of doing it and ways that will only annoy.

How do you do follow-up right? Here's what works for me:

1. If you haven't followed up, you haven't really pitched.

This seems like it should go without saying. But too many people will send one email or leave one phone message and never get in touch again if they don't get an answer. If something's worth going after, it's worth trying more than once.

2. Follow up at least two times more than you think you should.

In another case, I sent a pitch, then one follow-up, and then gave up. Four months later the customer got back to me--very apologetically--to ask if I was still interested. I was, and that company has since become one of my best clients. It was sheer dumb luck that this particular customer remembered my pitch or else found it again in her inbox. If she hadn't, I would have missed a really good thing by giving up too soon.

3. Assume your customer has forgotten your pitch.

You'll have the best chance of success if you figure on starting over from scratch every time you get in touch. If your original proposal was an email, include that email in your follow-up. If you have a prospect on the phone, or are leaving a message, remind him or her in as few words as you can what you proposed.

4. Don't act like you're owed anything.

It can be tempting to get peevish the third or fourth time you've followed up and gotten no response. Keep in mind that no matter how many times you've gotten in touch or how perfect your offer is for that client, no one there is obligated to respond to you in any way. Your fifth follow-up should be as polite in tone as your first one was.

 5. Try multiple channels.

Not getting a response to your emails or phone messages? Try an @ message on Twitter, or a message on LinkedIn or Facebook. If you have multiple contacts at a prospective client and one isn't answering you, try someone else. (Make sure to let each contact know who else you've contacted, though, or this can backfire.)

6. Your objective is an answer.

If you've set yourself a "no" quota, you know that an answer, even a turn-down, is much better than getting a non-answer such as "I'll get back to you." (If you don't have a "no" quota, you should.)

But some people are uncomfortable saying no, so they'll try to put off the inevitable. Fight that tendency by giving the person a reason to give you an immediate answer, such as a limited-time discount. And if your contact says something like "I'll get back to you," set a time when you'll get back to him or her instead.

7. Have a plan.

What happens if and when you get that "no"? Have an immediate plan. What other customer can you pitch to next? What other product can you pitch to this client? Getting turned down should just take you to the next step along your planned path. By the way, you should also know what your next step is if the answer turns out to be yes.

8. Say thank you.

Whatever answer you get, someone took the time to read your proposal, or speak with you on the phone. They gave you some of their time and attention, which is a scarce commodity for every professional these days. They may have given you information that can help you make your product better, or some ideas about how to sell it elsewhere. And if you thank them, they're likely to remember how gracious you were--and want to do business with you in the future.

U.S. Private Equity and Venture Capital Funds Earned Positive Returns for Q3 2013 and Improved on Their Q2 Results,

U.S. Private Equity and Venture Capital Funds Earned Positive Returnsfor Q3 2013 and Improved on Their Q2 Results, According to CambridgeAssociates

Returns for Venture Capital Investments Moved Ahead of Private Equity Year-to-Date

BOSTON, MA, Mar 05, 2014 (Menafn - Marketwired via COMTEX) --In the midst of a strong period for public equities and a healthyIPO market, U.S. private equity and venture capital funds generatedpositive returns for the third quarter of 2013, with venture capitaloutperforming private equity for the period. Over short and mediumterms ending on September 30, 2013, both alternative asset classescontinued to struggle against the public markets. Over the long termthe opposite remained true, as both private equity and venturecapital funds delivered returns that easily bested those delivered bypublicly traded equities, according to Cambridge Associates.

Quarterly returns for both indices were more than two percent greaterthan in the prior period. In the third quarter, the CambridgeAssociates LLC U.S. Private Equity Index rose 5.1%, bringing itsyear-to-date return to 13.3%. For comparison, the S&P 500 gained 5.2%and 19.8% over the same periods. The Cambridge Associates LLC U.S.Venture Capital Index returned 6.5% and 14.0%, respectively, for thequarter and year-to-date. Its closest public market counterpart, theRussell 2000, gained 10.2% and 27.7% for the same periods.

The table below details the performance of the Cambridge Associatesbenchmarks against several key public market indices. Returns forperiods of one year and longer are annualized.

Fundraising Mistakes Founders Make

There’s a lot written about what you should do when you raise money, but there hasn’t been as much written about the common mistakes founders make. Here is a list of mistakes I often see: 

• Over-optimizing the process
A lot of founders try to get way too fancy with tricks that they think will help them raise money.  It’s actually quite simple; if you have a good company, you will probably be able to raise money.  You’re better off working to make you company better than working on fundraising jiu jitsu.
 
The process is simple:
  1. Get intros to investors you want to talk to and reach out to them, in parallel, not in series - this is important, see (3).
  2. Explain to them why your company is likely to make them a lot of money. This usually includes the company’s mission, the product, current traction, future vision, the market, the competition, why you’re going to win, what the long-term competitive advantage will be, how you’re going to make money, and the team.
  3. Set up a competitive environment. You'll (unsurprisingly) get the best terms when multiple investors compete with one another for space in your round.  This is the one rule of "the game" that is really important--I'll talk about it more later on.
Some founders try things like carefully timing news articles, casually mentioning to one investor that they'll be having dinner with another investor, claiming their schedule is really packed except for one specific hour, and other tricks - but if you just build a good company, you generally won’t need to.
 
Many little things simply don't matter very much--for example, the "signal" sent when an early investor chooses not to participate in a later round. If the company is doing well stuff like this is easily overlooked, and if the company's not doing it will struggle to raise money anyway.
 
Unless you do it perfectly, game-playing will hurt you with most good investors. And you should be trustworthy and honest no matter what. Investors won't back you if they can't trust you.
 
• Over-optimizing the terms
Startups are usually a pass-fail course -- either you succeed or you don't.  If you fail, maybe you get acqui-hired, but that's happening less frequently and is usually little better than just getting a job at the acquiring company instead.
 
The important thing is to get good investors, clean terms, and not spend too much time fundraising. The biggest problem comes from chasing high valuations. Contrary to what many people think, at YC we encourage companies to seek out reasonable valuations. Valuations are something quantitative for founders to measure themselves on, and there are lots of investors willing to pay high prices, so they don’t always listen. But I’ll say it again: trying to get really high valuations is a mistake.

If you’re clearly in a position of leverage, it’s fine to push for a high valuation, but don’t jerk investors around. Just say what you want and don’t get into a lot of back and forth or term complexity. Also remember that very high valuations often push out good investors.
 
And don’t forget the prime directive of fundraising strategy: set things up so that you never do a down round. The badness of a down round is difficult to overstate; in fact, the threat of that is the best reason not to take a super high price when you’re offered one.  If you raise at such a price, everything has to go perfectly in order for your next round to be an up one.
 
• Failing to create a competitive environment
Ok, here is the one part of the game I really believe is critical.  You generally need to set up a competitive environment to get a good outcome in fundraising (or, for that matter, any big deal).
 
The hard part is getting the first offer. Once you have this, you have the leverage -- if other investors don’t act fast, you have an offer you can take, and they risk missing a potentially great opportunity (and maybe looking stupid to their partners, etc etc.) Until then, they can procrastinate and wait as long as they want. It’s remarkable how long it can take the first offer to come in, and how quickly the next ten can materialize.
 
So sometimes you have the hack the process a little bit to get this first offer. The best way is to find someone who loves what you’re doing and is willing to act. Although it’s ok to use that offer to get others, you should be nice to anyone willing to act first by prioritizing their offer, finding a way to get them into the round even if someone else leads it, etc.
 
There are a lot of other tactics for this that I should write a separate post on at some point.
 
Beware, though, that saying things like “our round is closing really fast” when you have no offers usually backfires. Investors talk and will call your bluff.
 
When you have a good competitive environment the leverage shifts to you - you will be astonished at how much things change. Firms that previously couldn’t meet you for three weeks will suddenly be able to schedule full partner meetings on a Sunday. And when multiple bidders really want to invest, a lot of the "non-negotiable" terms like 20% ownership and board seats go away.
 
• Coming across as arrogant, antagonistic, disrespectful, etc.
Somehow, a myth got started that investors like this and nerdy founders sometimes put on an affectation.  Don’t do it.  Be respectful (which includes things like not asking investors to make a decision after a first meeting unless you really are about to close your round).
 
Remember that investors are people too. They want to feel loved. The first time I raised money, I was hesitant to tell the investors I really liked that I really liked them because I thought I was giving up leverage. But it turns out telling the investors you really like that you especially want to work with them makes them more positively inclined to you, not less.
 
• Not hearing no
Investors don’t want to kill option value; founders are optimistic people.  This leads to investors saying a very nice version of "no" and founders hearing "with just a few more conversations, I may get to a yes."  Anything other than a term sheet is a "no", and all the reasons don’t matter.  Move on and talk to other investors.
 
• Not having a lead investor
A lot of founders put together party rounds comprised of dozens of investors and congratulate themselves that no single investor has much power over them.  But in practice investors have little power over companies that are doing well anyway, and what they actually have is no investor that is super invested in their success.
 
It turns out it’s really valuable to have one investor that you meet with every month and report progress to. This forcing function creates an operational cadence in the company that is a big net positive. It’s remarkable to me how much more frequently the party round companies go off into the weeds.
 
• Pitching poorly
A lot of founders get caught up in trying to follow a perfect template, and drone on and on about their competitors, the market evolution, etc.  They’re bored and it shows.
 
The way to pitch well is to focus on the parts of the business that truly excite you. That will shine through, and it will get the investors excited. Conveying your passion for the business is almost as important as what you say, and it’s almost impossible to fake.
 
Even if you’re an introvert, it will usually come through to a sophisticated investor. So start with the parts you’re really excited about.
 
Investors want to hear a good story, and that includes things like how you decided to work on this idea, why it matters, how you met your co-founders, etc. So don’t leave those parts out of the pitch.
 
Also, remember that smart investors are looking for the really big hits. So don’t do obviously dumb things like talk about potential acquirers in a seed round pitch - that will suggest you’re not trying to build a really big company.

• Not reference-checking major investors
Great investors can add a huge amount of value; bad investors can make your life miserable.  Before signing up to work with someone for the better part of a decade, spend an hour calling founders they have worked with to get a sense of what's in store for you.
 
• Lacking a clear vision
If you don’t seem to have any strong feelings or conviction, and you agree with every suggestion the investor makes about your business, you'll risk coming across as lacking a clear vision.  You should always listen to what someone smart has to say, but you should be firm on the things you really believe.
 
Founders with a clear vision can usually explain what they’re doing and why it matters in just a handful of words. Clear vision also usually entails at least one big new idea. Even if it’s a familiar problem, there should be something important the investor hasn’t heard before.
 
It’s ok to have some big unknowns, of course. You’re not expected to have all the answers, but you should have clear theses to start with.
 
• Not knowing key metrics
There are two questions I really look at in early stage investments:
  1. Does the team know what to do?
  2. Can the team do it?
The first question is addressed by the bullet point above.  The second is addressed by showing that the team cares about operational quality.  I’ve found that teams that execute well always know their numbers (or current status if in R+D mode) cold, and that it’s one of the best predictors of execution quality.  It’s surprising how many companies pitch investors without knowing this information.