What are deal killers with investors?
Watch Out for Sand Traps, Land Mines, and Deal Killers
Imagine an inexperienced golfer, swinging and swinging away at a ball in a sand trap. Well, most venture capitalists will allow you to tee-up the ball and watch you take a swing. If you happen to land in a sand trap it demonstrates your competency (or really lack of) in the venture drill process.
Missing some details, forgetting names and conversations from your last talks, is all part of the process. You will get a lot of room for making simple errors because they know that you are going into unknown territory.
Land mines, however, are a different story.
Thomas Fuller, the English historian, once said, “Get the facts right, or the facts will get you.”
There are two types of land mines: an explosive that you will eventually stumble across, and an explosive that VCs will eventually stumble across. Venture capitalists evaluate business plans and presentations for a living. Remember everything you have said along the way because they will.
And be very careful about what is projected or promised in your talks. Consider the fact that you will be held accountable for your projections and promises.
Any deception in a plan or presentation will be caught right away and greatly lessens the possibility of an investment. Worse yet, having the VC step on a landmine in the due diligence process (something that should have been disclosed earlier) will probably permanently “disfigure” the deal and maybe damage some on the venture team as well.