What phrases do investors hate the most?

  1. We have no competition: If there is no one else doing what you are doing, how are the consumers currently solving the problem? E.g. in a online food ordering business, if there is no other brand does not mean that there is no competition. ‘Calling up the restaurants using menu cards available at home’ is your competition.
  2. “We are cheaper, hence we have a stronger value proposition”: Well, in many instances what the entrepreneurs meant was that they will sell cheaper.. which is different than being a lower cost producer. And, at least in my observation, most often the assumption of ‘we are cheaper’ was based purely on being a smaller and hence leaner company and not based on any fundamental competence or process that allowed them to retain the cost advantage, if any at all.
  3. “According to Gartner, the market is USD 80 billion by 2015”: Now, this has no relevance to a startup. More so if any case all you were trying to achieve anyway was USD 10 – 20 million in revenues in 2015. Startups should build their model ground up and not top down. I.e. they should think in terms of how much it costs and what does it take to acquire and service one customer and hence what is the possibile revenues within what you are trying to do.

Author: Prajakt Raut

Prajakt Raut is the founder of Applyifi.com, and author of the book for startups - ‘Starting Up & Fund Raising’ Prajakt personal goal in life is to encourage and assist a 100,000 people to become entrepreneurs. _____________ Prajakt is the founder of Applyifi - an online platform that provides startups a 36-point scorecard and assessment report on the venture's investment readiness [www.applyifi.com], and helps them improve their odds of getting funded. Prajakt is also the founding partner of The Growth Labs, a platform where growth-stage companies get sharp, incisive advice from senior professionals and experienced entrepreneurs. [www.thegrowthlabs.in] Before starting Applyifi, Prajakt was the head of operations at IAN, founding member of a leading incubator, and the Asia-Director for TiE (2004 - 2007). Previously Prajakt had co-founded Orange Cross, a healthcare services company, and was part of the founding team member of Idealake Technologies. While in college Prajakt had founded a printing business and has spent over 10 years working in leading advertising agencies. Prajakt’s book, ‘Starting Up & Fund Raising’, helps startups understand an investor’s perspective, and helps them improve their odds of getting funded. The book also helps entrepreneurs understand the building blocks of a business.

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