If You Do Any of These 3 Things in Your Pitch, Investors Will Know You’re Full of Hot Air

2. Name-dropping</h2>

Some entrepreneurs are overly arrogant when they present to VCs. They name drop. &quot;We&#39;re also talking to this big firm and that big firm, so make a decision by this deadline, or you&#39;re out.&quot; Generally, I&#39;ll respond to that kind of arrogance with a simple, &quot;I&#39;m out.&quot; If you can&#39;t be respectful to each person you meet, that tells me that you&#39;re not likely to listen to advisors. But, more importantly, name-dropping tells me that your biggest asset is your connections, not your company or product, which is a good indication that this may be a balloon pitch.</p>

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3. No product or no customers</h2>

If you have a great idea, test it. Get a prototype built. Try that prototype out on a few potential customers. Get some feedback. Re-work it as needed. But, coming into an investor meeting with nothing more than an idea is too soon. You will no doubt have to manufacture assumptions. Until an idea has been tested, it&#39;s just air.</p>

These are the issues I probe when talking to entrepreneurs. Getting to the heart of these issues not only helps me identify balloon pitches, but also when an entrepreneur is under-selling themselves.</p>

I recently invited four entrepreneurs to San Francisco for a month of intense learning with me and some other mentors. We called the program Neal&#39;s Running Start. One of the entrepreneurs almost didn&#39;t make the cut. She had excellent presentation skills but was much less confident than the other entrepreneurs. My first impression was that she might not have a solid company yet. But, again, I asked the revenue question. Turns out, sales were close to $1 million a year and she had some Fortune 1000 customers already, even without investors. She simply thought there was no way she was as savvy as a Silicon Valley entrepreneur because she was from a small town in Canada. Rather than giving us a balloon pitch, she underestimated her company. Just because her confidence wasn&#39;t at Silicon Valley arrogance level, didn&#39;t mean she wasn&#39;t running a successful company. With the right questions, we ascertained that she had the real deal. I, along with several other mentors from Neal&#39;s Running Start, invested in her company.</p>

Related:&nbsp;Get To The Point! What Does Your Business Do?</a></b></p>

True, some notorious Silicon Valley companies have been funded on nothing more than hype. You&#39;ve read stories</a> of millions of dollars dumped into startups who blew it on parties, premature product launches, and lengthy and costly development cycles because the initial product didn&#39;t work. As investors chase the next unicorn, there will be some bad investments by bad investors who throw in money</a> and walk away without minding that investment. Most credible VCs are not like that. We get to know our portfolio companies and guide them. Outside of tech, an investor is extremely unlikely to invest in hype, as prototyped products are usually more tangible than software code.</p>

The most important thing you can do in your pitch is make a human connection with your potential investor. Present your company in a succinct way, but find a way to connect and build early trust. Once we get past the pitch, investors will dig for evidence and concrete results. If you tell us in your presentation you have one thing, but it turns out it&#39;s a balloon pitch, we won&#39;t trust you again. Be honest. Because the phase before investment is called &quot;due diligence.&quot; During that due diligence process, we will discover everything about your company, including if it&#39;s a bunch of hot air.</p>

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