Investors see many deals and can spot glaring holes immediately. Here are five reasons an investor will take a pass on your deal:
1. There’s no traction—there needs to be some evidence of market validation. Even without a sales team and a marketing budget there should be some demand for your product.
2. There’s no social proof—there needs to be some evidence the product works.
3. The team doesn’t fit your company—if there are major holes in the team or you’ve filled the secondary roles and left the primary ones empty, then it’s going to be a problem.
4. Your company doesn’t fit their criteria—many funds are clear about what they invest in (SaaS, Healthcare IT, etc). Your deal needs to fit into one of those criteria.
5. You don’t know your market/customer well enough—those with a vague or fuzzy knowledge of the market or customer will have difficulty raising funding. Ability to site numbers (market size, growth rates, customer spend, etc) helps demonstrate your knowledge.